Table 48. Medical care benefits: Percent of full-time participants in plans with mental health benefits by extent of
benefits, medium and large firms, 1989

Professional and adminis-| Technical and clerical Production
All participants trative participants participants and service 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 .. 98 95 98 98 98 97 98 a
Covered the same as other
ilinesses 24 2 22 2 22 2 19 2
Subject to separate limitations* 7 92 76 96 76 95 79 89
Limit on days 49 34 49 39 48 37 50 31
Per year .. 38 34 40 39 37 96 37 30
Per confinement 9 fy) 7 fu) 8 1 1 O
Per lifetime 2 0) 2 1) 1 (9) 2 6
Per other period = () = 19) ~ ) - -
Limit on dollars 38 66 36 64 39 66 40 68
Per day (9) 5 is) 4 i) 5 oO 7
Per year. 5 29 27 3 27 6 32
Per confinement 19) = 19) - Oo ~ - -
Per lifetime 33 3a 32 a2 36 35 33 28
Per other period ... i) 1 9) Q 19) iy) 1 1
Coinsurance limit 9 56 1 56 11 85 7 57
50 percent .. 4 43 5 42 5 4 3 44
Other’ 5 13 7 14 6 14 4 18
Ceiling on out-of-pocket
expenses does not apply .... 15 4 18 42 7 45 14 40
Separate copayment or
deductible 1 14 1 18 1 7 1 to
Other limitations .. oO Oo 1 iv) 1 “ iv) iv)
Without coverage 2 5 2 2 2 3 2 9

* Excludes doctor’s charges in the hospital.

® Includes treatment in one or more of the following: Outpatient de-
partment of a hospital, residential treatment center, organized out-

* Less than 0.5 percent.
© Includes plans with reduced coinsurance other than 50 percent
and plans where the rate of reimbursement varied during the treatment

patient clinic, day-night treatment center, or doctor's office. if benefits period.
differed by location of treatment, doctor's office care was tabulated.

2 The total is less than the sum of the individual items because
many plans had more than one type of limitation on mental health cov-

erage.

NOTE: Because of rounding, sums of individual items may not equal
totals. Where applicable, dash indicates no employees in this cate-
gory.

56



Table 111. Savings and thrift and deferred profit sharing plans: Percent of full-time participants by type of vesting

schedule, medium and large firms, 1989

‘ci Professional and administra-|_ Technical and clerical Production and service
All participants \ “tive participants Participants Participants
‘Type of vesting schedule Deferred Deferred Deterred
/ Deferred
Savings and Savings and | oer ere, | Savings and | | Defered | savings and 7
i profit sharing | S2¥' profit sharing profit sharing | Sé¥! profit sharing
the plans ag | tht plans | oe =| thr plans | Prot eres taitt plans | Prof sha
Totat 100 100 100 100 100 100 100 100
Immediate full vesting 20 37 28 30 33 35 29 42
Clift vesting’ with full vesting
after: 25 12 25 " 23 ¢ 27 4
4-2 years 2 - 1 - 1 - 3 -
3-4 years 4 4 10 2 9 1 8 7
5 years "1 4 13 5 12 5 9 4
More than 5 years . 1 4 1 3 1 4 2 4
Graduated vesting? with full
vesting after: 32 50 30 57 31 55 37 “4
4 or fewer years .. 4 2 3 o) 3 1 5 2
5 years 19 6 20 7 20 12 19 3
6 years 2 7 2 "4 2 5 3 5
7 years 3 20 2 19 3 16 4 22
fo years y 0 *, 3 ° ‘4 °, 8
years
11-14 years v) 4 °) 5 a) 4 4
16 years - - - 1 - 1
Greater than 15 years ° - iv) - v) - 1 -
Class vesting’ with each class
fully vested after: 13 1 17 2 13 1 8 e
1 year iv) - 1] - is) - 0. =
2 years 7 1 7 2 7 1 6 to)
3 years 5 - 8 - 5 - 1 -
More than 3 years 1 iv) 2 “ 1 v) 1 -

‘ Under a cliff vesting schedule, an employee is not entitled to any
benefits accrued under the plan until satisfying the requirements for 100
percent vesting.

® Graduated vesting schedules give an employee rights to a gradually
increasing share of accrued benefits, determined by years of service,
‘eventually reaching 100 percent vesting status. During 1989, as a result
of the Tax Reform Act of 1986, sponsors of most single-employer plans
who adopt this form of vesting must alter their schedule to provide full
vesting by the end of 7 years of service.

> Less than 0.5 percent.

* Under class-year vesting, employers’ contributions for a particular
year (class) become nonforfeitable after employees satisfy vesting re-
quirements. Subsequent years become fully vested as each class ma-
tures. Included here are class year schedules with both graduated and
cliff vesting features.

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

totals. "Where applicable, dash indicates no employees in this cate-
gory.

120

|
i
|
|
|



Table 18, Short-term disabillty coverage: Percent of
full-time employees by participation in sickness and accident
insurance pians and paid sick leave plans, medium and large

firms, 1989

‘Type of plan

Allem-

Profes-
sional | Techni: | Produc-
and | cal and | tion and

ployees adminis-| clerical | service

trative | employ: | employ-
employ-| ees. ees
ees

Total

With short-term disability coverage ...

Sickness and accident insurance
only ..
Wholly employer financed ..

Paid sick leave only

Combined sickness and accident
insurance/paid sick leave ..
Wholly employer financed ..

Without short-term disability
‘coverage

1

}00 100 100 100
89 96 92 84

24
19

40
36

46 67 63 26

ne
ao

22 26 24 19
7 20 19 15

" 4 8 16

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

Table 19. Short-term disability benefits:’ Average number of days available and percent of pay covered for

full-time participants, medium and large firms, 1989

fei Professional and Technical and clerical | Production and service
All participants administrative participants participants participants
Length of service Fully | pepia Fullpay | pepte- Fulpay| popia- FullaY) epee
Days | equiva- Days | equiva- Days | equiva- Days | equiva-
lavaiabie| lent | CTP Javaiabie| lent | 272 lavalable| lent | Corr Javallable) lent sement
days? days? days? days? | ‘ato
ee | 53 | 54 o2 | 59 | 6 | 79 | 47 | 6 | 112 | 51 | 46
103 | 57 | 55 se | 64 | 67 | 83 | s2 | 62 | 18 | 55 | 47
yoo | 61 | 57 | 102 | 70 | 69 | 89 | 57 | 6 | 119 | 57 | 48
i | 6 | 6 | 107 | 77 | 72 | 96 | 6 | 68 | 122 | 59 | 49
At 18 years v2 | 68 | 61 | 109 | 8 | 74 | 97 | o8 | 70 | 123 | 61 | 50
At 20 years via | 71 | 62 j 110 | 82 | 7 | 98 | 70 | 72 | 126 | 63 | 50
At 26 years vs | 72 | 63 | 111 | 84 | 76 | 99 | 72 | 73 | 126 | 64 | 51
AL 30 years 15 | 72 | 6 | mm | se | ve | 99 | 72 | 73 | 6 | o |

* Coverage includes annual and per-disability sick leave,
sickness and accident insurance, and any combinations available.
Averages are for the first illness of the year, with no benefits
carried over from prior years. Benefits may or may not require a
waiting period, either initially, or between various payments.

? Full-pay equivalent days take into account days available at
full and partial pay. For example, an employee receiving 30 days
at full pay and 60 days at half pay would have 60 full-pay
equivalent days (30 times 1.00 + 60 times .50).

22

2 Represents the percent of full pay replaced during the
available short-term disability days. An employee with 110 days
available and 60 full-pay equivalent days has a replacement ratio
of 55 percent.

NOTE: Averages exclude workers covered by plans that do not
specify the maximum number of days available, and workers not
covered by short-term disability benefit plans,



Preface

This bulletin presents results of a 1989 Bureau of Labor
Statistics survey of the incidence and detailed provisions of
selected employee benefit plans in medium and large
firms. It is the Bureau’s 10th survey in this series , and pro-
vides representative data for 32.4 million full-time em-
ployees in the Nation’s private nonagricultural industries.
Appendix A provides a detailed description of the cover-
age and statistical procedures used in the survey.

The 1989 Employee Benefits Survey reports on benefits
provided to employees in establishments with 100 workers
or more in all private nonfarm industries, the sameas in the
1988 survey. Prior private industry surveys (1979-86) in-
cluded establishments with either 100 or 250 employees or
more, depending on the industry, and coverage in the ser-
vices industries was limited. The 1987 survey looked at be-
nefits provided to employees in State and local govern-
ments. The government survey is being repeated in 1990,
along with a survey of benefits provided to employees in
small private establishments (those with fewer than 100
workers). Benefits provided to employees in medium and
large private establishments will be surveyed again in 1991.
This pattern of alternating surveys will continue in the fu-
ture.

Data for this bulletin were compiled and analyzed in the
Division of Occupational Pay and Employee Benefits
Levels by Michael Bucci, Thomas Burke, Edward Coates,
Cathy Cooley, Jason Ford, Avy Graham, Douglas

iti

Hedger, Stephanie Hyland, Rita Jain, Natalie Kramer,
Marc Kronson, Michael Miller, John Morton, David Ott,
Margaret Simons, Cynthia Thompson, Jerline Thompson,
and Arthur Williams, under the direction of Allan Blostin
and James Houff. Text was prepared for publication by
Mahin Besharat.

Computer programming and systems design were pro-
vided by David Caples, Mary Constable, Mohamed EI-
zein, Aholivah Maier, Cheryl Sims, and Edward Thomas
of the Division of Directly Collected Periodic Surveys, un-
der the direction of Leslie Chappel. Larry Huff, Thomas
Kelly, and Ronald Lambrecht of the Statistical Methods
Group (Office of Compensation and Working Conditions)
were responsible for the sample design, nonresponse ad-
justments, sample error computations, and other statis-
tical procedures, under the direction of Chester
Ponikowski. Fieldwork for the survey was directed by the
Bureau’s Assistant Regional Commissioners for
Operations.

Material in this publication is in the public domain and,
with appropriate credit, may be reproduced without per-
mission.

Pictured on the cover of this bulletin is Agent Interview
by Norman Rockwell (c) 1956, Estate of Norman Rock-
well. The reproduction used to produce the cover was pro-
vided courtesy of The Norman Rockwell Museum at
Stockbridge, Stockbridge, MA.



Table 105. Savings and thrift plans: Percent of full-time participants by provision for employer matching contributions,

medium and large firms, 1989

Matching percentage?

Employee earnings to be matched’ | Total 5 7
25 percent | 50 percent | 75 percent |100 percent Retina aries with ne Other?
All participants
100 7 98 4 14 13 6 "1 7
3 = 1 - 1 - Oo iy) 9)
8 ) 2 - 4 1 0 1 “
"1 2 3 1 2 1 - ) 2
14 1 4 ry) 2 3 1 2 (0)
a7 2 22 i) 4 5 4 7 3
3 - 2 iV) 1 iv oO - -
4 - 1 2 iV) iv 0 - 1
% 4 4 9 : 4 0 0 0
) : : - - iy) ~ Q ~
Greater than 12 percent .. 1 0 0 - 0 iy) 0 iv) -
Specified dollar amount .. 4 o 2 - 0 1 is) - iy)
Professonal and administrative
Total 400 5 33 6 15 18 6 10 6
Up to the first:
2 percent .. 2 - 1 - 1 - - 6 0
3 percent .. 9 ) 2 - 5 1 9) ) iy)
4 percent . 9 2 3 i 2 1 - 6 2
5 percent .. 15 1 4 1 3 8 1 1 “
6 percent .. 45 2 19 0) 4 7 4 7 3
7 percent . 5 - 3 1 1 iy) “ - -
8 percent . 7 - 2 3 o 0 1 -
9 percent .. 1 - : 1 - - - -
10 percent 4 1 iy) - - 3 iv) 19) Oo
42 percent iv) = ~ - - i] - QO -
Greater than 12 percent .. 1 QO oO - - 9) 0 i) -
‘Specified.dotlar amount 2 1 iv) - 1 iy) 0 - Oo
Technical and clerical
Total... 100 5 36 4 16 13 6 14 6
Up to the first:
2 percent 2 - “ - 1 - ~ iv) Oo
12 i) 3 - 6 1 o 2 “)
1 1 3 1 2 2 - o) 2
10 0 2 1 2 3 1 2 0)
48 at iv) 4 4 4 9 3
2 - 1 iy) 1 19) iY) - -
4 - 1 1 iv) 0) iv) - 1
0 - - 0 - - ~ - -
5 1 2 - - 2 iv) 9] 0
) - - - - i) - 0 -
Greater than 1 “ oO - - cv) iy) “ -
Specified dollar amount..... 5 iv) 3 - 1 oO oO - iv)

See footnotes at end of table.

116



Table 56. Medical care benefits: Percent of full-time participants by requirement for employee contribution, medium and large

firms, 1989
Professional and adminis-| Technical and clerical | Production and service
All participants trative participants participants participants
Type and amount of contribution
Employee | Family | Employee | Family | Employee | Family | Employee | Family
coverage | coverage | coverage | coverage | coverage | coverage | coverage | coverage
Health maintenance organizations 100 100 100 100 100 100 100 100
Non-contributory . 40 26 39 24 35 20 46 32
Contributory «. 59 73 61 73 65 79 54 67
Not determinable 0) 1 0) 3 0) 1 QO 1)
Non-health maintenance organizations .. 100 100 100 100 100 100 100 100
Non-contributory .. 55 36 51 32 48 29 60 4t
Contributory 45 64 49 68 62 a 40 59
Not determinable i) Q rv) ) 0 rv) Yo oO

* Less than 0.5 percent.

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

Table 57. Medical care benefits: Average monthly
Contribution of full-time participants in contributory plans,
medium and large firms, 1989

Profes-
sional and| Technical | fro’
All partic-| adminis- | and cleri-

Type of coverage Pants trative |cal partici- oartice
partic: | pants | Pam
pants Le

All plans
Employee coverage . $25.31 | $21.57 | $25.05 | $27.48
Family coverage’ 72.10 | 7276 | 7983 | 67.18
Health maintenance

organizations
Employee coverage . 2162 | 2028 | 2418 | 2081
Family coverage’ 75.09 | 75.07 | 85.35 | 66.22

Non-health maintenance

organizations
Employee coverage 2632 | 2005 | 2650 | 28,76
Family coverage 7141 | 7208 | 7797 | 67.34

' If the amount of contribution. varied by either size or composition of

family, the rate for an employee with a spouse and one child was used.



Table 69. Life insurance: Percent of full-time participants in plans with multiple-of-earnings formulas’ by amount of basi

insurance and maximum coverage provisions, medium and large firms, 1989—Continued

in plans In plans with maximum coverage
without
Formula Total | maximum Al Less than | $50,000- | $100,000- | $250,000- | $500,000- | $1,000,000
coverage $50,000 | $99,999 | $249,999 | $499,999 | $999,999 | or more
Production and service
Total 100 44 56 9 8 9 10 10 8
Life insurance is equal to annual
eamings times?
Less than 1.0 .. 3 2 1 - i) 1) iW) VW) 0.
a7 21 25 4 4 8 2 5 5
1 e 1 = - > 1 - @
8 2 8 10) 2 iV) 3 2 e)
- 1 - 1 - - - :
30 18 13 1 1 3 3 2
iv) is) - - < = - -
7 1 4 e 1) 1 (7)
1) = a) - e - = = -
1 @ a - e 1 @) iv) e
2 iv) @) iy) - - Q = i) @
Multiple varying with earnings .... 1 iv) 1 - - iv) rv) - -

* Includes participants in plans in which insurance equaled a multiple
of earnings, plus or minus @ specific amount. In such cases, only the
multiple of earnings was included in the tabulation.

2 When the multipte-of-eamiings formula varied with age, the maximum
multiple was tabulated. A few plans varied the multiple-of-earnings for-
mula according to service; in these cases, a participant was assumed to

have 15 years of service.
® Less than 0.5 percent.

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

Table 70. Life insurance: Percent of full-time participants in
plans with flat dollar insurance’ by amount of basic
insurance, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
All par- and cal and tion and
Amount of insurance ticipants adminis-| clerical | service
ip trative | particl- | partici-
partici- | pants | pants
pants
Total .. 100 100 100 100
Less than $2,000 2 1 1 2
$2,000-$4,999 8 5 5 10
$5,000-$9,999 ........ 28 at 29 a7
$10,000-$14,999 34 29 32 6
$15,000-$19,999 10 8 13 10
$20,000-$24,999 6 9 6 6
$25,000-$29,999 7 10 7 6
$30,000-$49,999 2 1 3 2
$50,000-$99,999 2 5 4 1
$100,000 and over .. eQ eQ © -

* Excludes participants in plans where insurance was a flat amount

based on service or age.
* Less than 0.5 percent,

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

76



Table 7. Paid holidays: Percent of full-time-employees:by
number of paid holidays provided each year, medium and

large firms, 1989

= Table’8." Paid holidays: Percent of full-time participants by

P
medium and large firms; 1989

y on holidays that fall on'a regularly scheduled day off,

Profes- Profes-
sional |Techni-|PTegue” sional | Techni- | Produc-
Atvem.| and. [cal and] $97 A par. |_278._| Gal and |tion and
Number of days MI er admin: | clerical | , oN Holiday policy A 2 |adminis-| clerical | service
Ployees |istrative |employ-| toy. ia trative | partici- | partici-
employ} ces |oTME partici- | pants | pants
ees pants
Total . 100 | 100 | 100 | 100 Total . 100 | 100 | 100 | 100
Provided paid holidays o7 | 97 |. 96 |- 97 Holiday is not observed ... 2 1 1 3
Under § days 3} 2/0 5
5 days 2, 4 2) 3 ‘Another day off granted ..... sa | a6 | 87 | 80
5 days plu more half days | () iv) 1 0)
6 days jo] 6) 10! 12 Additional day's pay in lieu of
6 days plus 1 or more half days | | © | Mh CO holiday .. 3 2 2 4
7 days .. 1 8} 9) 13
7 days pius 1or more half days -| () | ( | O | 0 ‘Another day off or day's pay,
8 days 9) | 2] 7 depending on when holiday falls ..) 10 8 ef] on
8 days plus 0) 0) ) 0)
9 days | 8] 9] 8 7 ‘Another day off or holiday not
9 days plus 1 or more half days.) 1 1 1 1 observed, depending on wrien
10 days .. 24) 26 | 28+) 19 HOLidaY fAllS sevnrrnnenntnentn 1 1 1/0
40 days plus 1 or more half days | 1 1 1 1
11 days ... fot f ott fo ta Other provision applies* . 1 1 110
11 days plus 1 or more hal iv) iv) 0, 0)
12 days .. 7] 104 7]. 6 Holiday policy not determinable 0 1/0 | 0
42 days plus 1 or more half days} () | © | O | 0
13 days oe ee eae + Less than 0.5 percent
13 days plus 1 or more raifdays |) | OO FO 2 Includes plans where the policy differs by holiday.
ys 1 1 1 1
More than 14 days... 1 1/0 1 is;
1 ‘ ; ‘ NOTE: Because of rounding, sums of individual items may not equal to-
Number of days not available 0 o 0 i) tals. Where applicable, dash indicates no employees in this category.
Not provided paid holidays . 3{ 3} 4/3

* Less than 0.5 percent.

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

12



Table 114. Flexible benefits plans and reimbursement
accounts:’ Percent of full-time employees eligible, medium
and large firms, 1989

Protes-
sional | Techni- | Produc-
and | cal and | tion and
jadminis-| clerical | service
trative | employ- | employ-
employ-| ees | ees
ees

All em

Coverage ployees

Total ... 100 100 400 100

Eligible for flexible benefits and/or

reimbursement accounts 24 38 33 1"
Flexible benefits 9 14 18 3
With reimburs 8 12 14 2
Reimbursement accounts .. 23 36 34 Ww
Freestanding reimbursement
accounts 15 24 7 8

Not eligible for flexible benefits or

reimbursement accounts ... 76 62 67 89

' Flexible benefits plans, also known as flexible compensation and
cafeteria plans, allow employees to choose between two or more benefits
or benefit options -- cash may be one of the options ~ in determining their
individual benefit packages. Reimbursement (flexible spending) accounts,
which are used to finance benefits or expenses unpaid by insurance or
benefit plans, may be part of a flexible benefits program or stand alone
(freestanding accounts). These accounts may be financed by . the .em-
ployer, employee, or both. The employee contribution is usually made
through a salary reduction arrangement.

NOTE: Sums of individual items do not equal totals because some em-
ployees were eligible for both flexible benefits plans and reimbursement
accounts. Where applicable, dash indicates no employees in this cate-
gory.

Table 115. Reimbursement accounts: Percent of eligible
full-time employees by expenses covered, medium and large
firms, 1989

Protessio- | Technical | Production
Expense All elgibte | 08) 204 | and and
per employees | °°" 10 clerical | service
‘employees employees | employees
Health care premiums 40 40 38 42
Health care deductibles.
and coinsurances! .. 79 at 85 66
Other health care
expenses? ., 78 81 85 64
Other benefit plan
premium: 17 16 14 22
Child care expenses’ 87 89 89 82
Legal expenses 3 4 4 1

* A deductible is a dollar amount that must be paid by a health care
plan participant before the plan will begin paying benefits. A coinsurance
is a percent of expenses that must be bome by the plan participant.

® Includes items not covered by a health care plan, such as hearing
‘examinations or eyeglasses.

* The most common benefit plan premiums included were for life and
long-term disability insurance.

“Most accounts reimbursed expenses for all dependent care, including
care for elderly or disabled adults.

NOTE: Where applicable, dash indicates no employees in this category.

125



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

United States,’ 1989

Number of workers in establishments
‘on? Number of establish-
Industry division? a
ments ° Professional and Production and
Total ‘administrative | Technical and clerical coven
Within scope of survey

All industries 109,929 40,530,168 9,030,826 7,950,032 15,446,747
Manufacturing .. 35,201 14,128,935 3,060,859 1,839,780 8,038,553
Nonmanutacturing 74,727 26,401,228 5,969,967 6,110,252 6,608,194

Mining .. 1,284 352,900 114,621 78,003 185,760
Construction 3,201 667,144 106,616 67,721 407,012
Transportation, communications,

electric, gas, and sanitary services 5,051 3,919,779 773,990 784,583 1,827,142

Wholesale trade 5,819 4,395,106 402,674 296,476 661,467

Retail trade 19,468 6,876,880 576,611 753,454 2,034,467

Finance, insurance, and real estate .| 9,679 3,661,099 1,301,180 1,872,763 109,829

Services son 30,225 10,128,320 2,694,275 2,267,251 1,912,516
Studied"

Al industries .. 4,647 6,551,182 2,004,572 4,506,025 2,148,621
Manufacturing 522 2,378,068 766,593 351,068 1,228,080
Nonmanutacturing 4,125 4,173,114 1,237,979 1,184,959 923,541

Mining 15 22,550 9,557 5,867 6,654
Construction 2B 24,624 4,581 3,041 14,594
Transportation, communi

electric, gas, and sanitary services 152 1,528,896 365,889 391,564 567,486

Wholesale trade | 34 131,497 75,561 44,218 10,674

Retail trade .. ‘ 107 505,230 52,806 93,085 98,829

Finance, insurance, and real estate . 180 639,389 277,651 306,952 9,041

Services 612 1,320,928 451,934 310,232 216,263

" Excludes Alaska and Hawaii and establishments with fewer than nel in constant travel status (e.g,, airline pilots)—-are excluded from the
100 workers. counts of employment by occupational group.

? As defined in the 1972 edition of the Standard Industrial Classifica- * These figures refer to all respondents to the survey, whether or not
tion Manual, U.S. Office of Management and Budget. Industry data are _—they provided data for all items studied. See the section on survey re-

shown for informational purposes only and are subject to larger than nor- sponse.

mal sample error. See section on reliability of estimates.
® This figure includes out-of-scope workers. These workers—execu-

131

NOTE: Because of rounding, sums of individual items may not equal
tive management, part time, temporary, seasonal, and operating person- totals.



Table 63. Dental care benefits: Percent of full-time
participants by deductible provision’, medium and targe
firms, 1989

Table 64. Dental care benefits: Percent of full-time
participants by yearly maximum.amount of coverage,’
medium and large firms, 1989

Protes- Profes-
sional | Techni- | Produc- sional | Techni- | Produc-
Allpare | and. | cal and ! tion and All pare |__| cal and | tion and
Type of deductible? ticipants |20minis-| clerical | service Dollar amount? ticipants |@dminis-| clerical | service
pants | ‘trative | partici- } partici- Hcipants | ‘trative | partici- | partici-
partici- | pants | pants partici- | pants | pants
pants pants
Total 100 | 400 | 100 | 100 Total .. 100 | 100 | 100 | 100
Subject to separate dental Yearly maximum specified? 82 82 83 8
deductible” 63 67 70 56 Less than $600 . 1 1 iv 1
5 4 5 5
Yearly deductible only 56 60 61 $501-$749 1 i) 1 2
Under $25 1 1 iy) 1 $750 10 10 9 14
22 23 22 21 $751-$999 2 2 2 3
1 1 1 1 $1,000 43 42 44 43
27 30 92 22 $1,001-51,499 .. 4 4 3 4
1 1 1 1 $1,500 10 1 10 9
3 3 4 3 $1,501-$1,999 . 1 1 ) 1
(o) 1 1 “ $2,000 4 5 7 2
$2,001-$2,999 . 1 1 1 )
Lifetime deductible only 3 2 2 3 $3,000 or more iv) 1 “) i)
50 2 2 2 2
‘Over $50 1 iv) iv) 1 No yearly maximum .. 18 18 7 19
Both yearly and lifetime Maximum provision not determinable} (‘) oO iv) 0.
deductibles 5 5 6 3
* Includes all covered dental procedures except orthodontia.” Amount
Subject to overall plan deductible... 2 4 7 of maximum specified is for each insured person, .
it Coverage for dental procedures may also be subject to scheduled al-
No deductible .. 33 a 26 ov lowance, deductible, or coinsurance provisions in addition to maximum dol-

| 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.

° Deductible may not apply to all covered dental procedures. if sepa-
rate deductibles applied to different procedures, the sum of the deductible
amounts was tabulated.

* Less than 0.5 percent.

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

at

lar limitations.
* If separate yearly maximums applied to different procedures, the sum
of the maximums was tabulated. Maximums applied to dental expenses
only.
*" Less than 0.5 percent.

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



Table 26. Sickness and accident insurance: Percent of full-time participants by type and duration of payments, medium and

large firms,.1989

Total

Maximum weeks of coverage

Type of payment Less than Varies b
13 13 14-25 26 27-51 52 Over 52 | “Sloe”
All participants
All types .. 100 1 14 3 64 2 10 1 4
Fixed percent of earnings 87 1 7 2 43 0) 2 1 1
Less than 50 v) - 0 - () - - ~
26 - 2 1 22 - - 0) 0)
13 0) 2 1 8 0) 0) 1
1 - - - 1 - (0) - -
12 () 1 10) 9 () 1 9) 9)
2 9) Q) 0] 2 19) “ (). ()
1 - Y () «) ” - 1) ~
1 - 0) 0) 0) - - - 9)
0) - 10) - 0) 10) - - rv)
3 1) ) 0) 1 9) 1 - 1
1 10) - ~ 0 0) 1 7 “)
By length of E 1 - () 0) 0 - ) - )
By both service and length
disability ~ () (a) - - . 0
By earnings . - - () 0) - - ~
Fixed weekly dollar benefit ) 6 1 17 1 1 10) )
Less than $60 - 2 ) 2 QO - - -
$60-$79 - i) 0 1 - - 1) -
$80-$99 - (0) () 1 - : = =
$100-$119 0) 1 0) 3 - - - -
$120-8139 - 1) ~ 2 - “) - a
$140-$159 .. - 1 0) 4 QO 1) - -
$160-$179 - Yo - 3 0) - - -
$180-$199 - - 9) 1 > 1 -
$200-$219 ...... - () ~ 1 ¢) Q - =
$220 or more - is) 0) 1 9) iv) - 10)
Weekly dollar benefit varies .. 43 1 - 3 Q) 7 - 2
By earnings .. 12 - 1 - 2 ) 7 - 2
By service or 1 - 0) - ) - 0) - Cy
Data not available .. 1 - - - 0 - - 0) -
Professional and administra-
tive
All types 400 2 9 4 74 2 6 2 1
Fixed percent of earnings .. 7 2 7 3 61 1 1 1 1
Less than 50 QO - 10) - 0) > - = -
37 - 3 1 33 - () i)
20 iy 3 1 14 - 1 1 0)
14 1 1 0) " - 1) 1) Q
3 1 Q 9) 2 0) - 0] 10)
2 - 0) 1) 1) 1 - 10) -
1 - - 1 0) - - - -
0 - - 0 - - -
Percent of earnings varies 8 QO - 1 2 ¢) 4 - 0)
By service 3 iv) - ~ () 1) 2 - ()
By tength of disability 2 - - () 1 - 1 - Q
By both service and length of
AiSADINAY ssn - - 1 2 - - - -
By earnings ¢) - - - - 0 : a :
Fixed weekly dollar benefit 10 - 1 - 8 v) 0) Y -
3 - ) - 3 - - ~ -
0 - - - 0) - - ) -
1 - ) - 0) - - - -
1 - - - 1 - - - -
$120-$139 () - - - oO - - - -

See footnotes at end of table.

29

i


Table 88. Defined benefit pension plans:' Percent of
full-time participants in plans permitting early retirement by
reduction factor for immediate start of payments, medium
and large firms, 1989

Profes-
sional | Techni- | Produc-
Re i | and | cal and | tion and
tn fr och yuo © | man Srl | Sec
trative | partici- | partici-

partici. | pants | pants

pants

Total... 100 | 100 | 100 | 100
Uniform percentage® 49 46 54
Less than 3.0. 3 1 3
8 8 8

1 1 1

8 12 6

1 1 2

12 1" 14

is) - 9)

11 10 14

is) y) iy)

3 1 5

1 iv] 2

Percentage varies by age .. 49 53 53 45
Reduction differs for each year
of early retirement"
Reduction differs by age
bracket

7 19 20 15

32 34 33 30

Percentage varies by service 1 4 (9) 1

+ Excludes supplemental pension plans.

? In specific cases, uniform percentage reductions may approximate ac-
tuarial reductions, such as early retirement at age 55 with a reduction of 6
percent @ year between age 55 and the plan's normal retirement age of
62.

3 Less than 0.5 percent.
* Reduction schedule is related to actuarial assumptions of the life
expectancy at age that pension payments begin.

Rate of reduction is held constant within age brackets, but differs
among brackets, sometimes in approximation of an actuarial table. For
example, benefits may be raduced by 6 percent for each year between
age 60 and the plan’s normal retirement age, and by 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 55.

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

Table 89. Defined benefit pension plans:’ Percent of
full-time participants by provisions for disability retirement,
medium and large firms, 1989

Profes-
sional | Techni- | Produo-
- ‘All par- |_2%0_| eal and | tion and
Characteristic ticipants |29minis-| clerical | service
trative | partici- | partici-
partici- | pants | pants
Pants
Total with disability retirement
benefits at 79 79 83

Minimum requirements for
disability retirement?

Total .

No minimum requirement ..
No age requirement
1 year’s service

2-4 years’ service .. 1 1 0) 1
5 years’ service 3 3 3 3
6-9 years’ service .. 1 1 1 0
10 years’ service 30 22 23 39
15 years’ service 13 12 9 15
More than 15 ye 1 1 i) 1
Less than age 40 0) iv) i) i)
Less than 10 years’ service .. iv) - e) 0)
10 years’ service is) io) e re)
‘Age 40-49 2 2 2 1
No service requirement e iv) 1 ro)
10 years’ service 0) ) 1 iv)
More than 10 years’ service .. 1 1 1 1
Age 50 or more .. 6 4 5 8
No service requirement () i) (0) rs)
10 years’ service .. 5 3 4 7
More than 10 years’ service .. 1 1 1 2
‘Sum of age plus service (e) rv) 1 -
Receipt of fong-term disability
benefits 31 39 40 21

Benefit provisions

Total .. 100 | 100 | 100 | 100
Immediate disability retirement’ .. 57 47 a7 67
Unreduced normal formuta® 42 92 34 51
Reduced normal formuta® 7 8 7 6
Other than normal formula’ 8 8 5 10

43 53 53 33

Deferred disability retirement
With benefits based on:
Service when disabled
Service plus credit to retirement
date ...

Not based on service ..

6 7 6 6

46 a7 27
ie) iv) 0) is)

* Excludes supplemental pension plans.

? If a plan had alternative age and service requirements, the earliest
age and associated service were tabulated; if one alternative did not
specify an age, it was the requirement tabulated.

° Less than 0.5 percent.

“ immediate disability pensions may be supplemented by additional al-
lowances until an employee reaches a specified age or becomes eligible
for Social Seourity.

5 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, either based on years of service actually completed
oF projected to a later date.

© 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.

7 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 Secu-
tity offsets.

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



Table 30. Long-term disability insurance: Percent of full-

ime participants with benefits based on percent of earnings
formula by maximum monthly benefit, medium and large firms, 1989

Maximum monthly benefit

* See footnotes at end of table.

Total No
with maxi-
Type of payment Total | jax | $1600 | $1501- | $2001- | $9001- | s4001- | s5001- | $7801. /$10,001] OeT | mum
mum’ | or less | $2000 | $3000 | $4000 | $6000 | $7500 |$10,000) or more| Tarr jpayment
All participants
Total 100 72 5 5 2 6 18 9 10 5 2 28
Fixed percent of earnings .. 90 66 5 5 12 6 7 8 8 4 i) 24
Less than’50 percent 1 1 Vv) i) iv) i) i) = ) 9) - 1
50 percent .. 22 12 2 2 1 1 3 iv) 2 1 0 10
60 percent 49 38 2 2 9 4 10 4 5 2 - "1
65 or 67 percen 14 12 1 1 2 1 3 3 1 °) - 1
70 percent or more 4 3 - ) = is) 2 @ i) i) = 1
Other precent 1 1 e ie) - iv) ro) 1 - iv) 0
Percent varies by earnings ...... 5 3 ro) - iv) e iv) 1 1 1 - 2
Percent varies by service .. 3 2 iv) @ @ - - () 7) - 2 e
Percent varies during disability . 2 (0) - - e) - e) i) - - - 2
Professional and administra-
tive
Total... 74 3 3 13 8 20 1" 12 6 1 26
Fixed percent of earnings 90 70 3 3 13 5 19 10 4 5 (a) 24
Less than.50 percent .. 1 7) i) iv) 1) e iv) - iv) @) - 1
50 percent 7 10 1 1 1 1 2} 0 2 1 o) 7
60 percent 51 4 1 1 3 "1 5 7 2 - 10
65 or 67 percent . 15 14 1 1 1 4 4 1 1 - 1
70 percent or more . 4 3 - iV) v) 2 i) 1 1 - 1
‘Other precent ... 1 1 - - - iv) iv) 1 - e iv)
Percent varies by earnings ... 5 3 i) - i) ia) 0) () 1 1 - 2
Percent varies by service .. 2 1 e (a) W) - - iV) i) - ia) 1
Percent varies during disability.| 3 i) - - (a) - iv) 1) - - - 3
Technical and clerical
Total n 4 4 13 6 19 8 10 5 1 29
~ Fixed percent of earnings 94 68 4 3 13 6 19 8 9 5 ) 26
Less than 50 percent .. 1 1 ia) o) iv) @ 9) - 6) 9) - 1
50 percent 23 13 1 1 1 1 6 0) 2 1 ° 10
60 percent 49 37 2 1 9 4 9 5 6 3 - 12
65 or 67 percent 15 13 1 1 3 1 2 3 1 i) - 2
70 percent or more 5 4 - - = (e) 2 i] 1 1 = 1
Other precent .. 1 1 iv) e - iv) ® 1 - cv) i)
* Percent varies by earnings ....] 3 2/0 - ° a) 0) o) 1 1 - 1
-Percent varies by service 1 4 io) ) () - - ) - - 1 io)
Percent varies during disability .| 2 ra) - - 17) - i?) - - - - 1

36

i
i



Table 53. Medical care benefits’: Percent of full-time participants by type of plan and
coverage for selected special benefits, medium and large firms, 1989

’ Health maintenance | Non-health maintenance
Benefit item All plans ‘organizations organizations
All participants
Hearing care® 26 93 12
Orthoptics? : 3 to) 4
Routine physical examinations 28 97 14
Organ transplant 26 23 26
Well-baby care 34 95 22
Immunization and inoculation 28 98 14
Professional and adminstrative
Hearing care 29 92 12
Orthoptics* : 3 co) 4
Routine physical examinations 34 98 7
Organ transplant 24 23 24
Well-baby care 40 96 25
Immunization and inoculation 33 98 15
Technical and cterical
Hearing care* 28 94 8
‘Orthoptics® 3 ) 4
Routine phy: 31 97 14
Organ transplant 24 22 26
Well-baby care... 40 96 26
Immunization and inoculation .. 29 98 ‘2
Production and service
Hearing care® 24 94 14
Orthoptics* 4 - 4
Floutine physical examinations 24 97 13
Organ transplant 27 23 28
Well-baby care .. 27 92 18
Immunization and inoculation . 25 98 14

* Plans providing services or payments for serv-
ices rendered in the hospital or by a physician, Ex-
cludes plans that provided only dental, vision, or pre-

scription drug coverage.

?' Plan provides, as a minimum, coverage for hear-

ing examination expenses.

61

® Exercises to improve the function of the eye

muscles.
* Less than 0.5 percent.

NOTE: Where applicable, dash indicates no em-

ployees in this category.



Table 27. 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, 1989

Maximum weekly benefit,
Type of nt Total | Tt! | Less ne
'ype of paymer otal | with | $e85 [$100 to]$120 to|$140 to] $160 to}$200 to|$250 to}$900 to|$350 10) $400 or max
maxi | giop | $119 | $199 | $169} $199 | S249 | $299 | $349 | $999 | more mum
mum
All participants.
Total .. 100 | 66 1 2| 0 28 2| 12 5 3 2| mw] 34
Fixed percent of earnings oa | 64 1 2/0” 28 2| 2 3 10 | 30
Less than 50 1 Y) ¢) - - - - - - - . fay
50. 43} 34) = 1 - 26 1 2 1 1] 0 3 9
60 22 13 - iv) Y 1 0 1 4 1 1 5 8
66. 1 1 = - Q) 0) 0 - - - 10)
67. 2} 2] 0 1 - | 1 8 1 1/0 1 7
70. 4 2 19) - Y 1 Y Y ) ~ ” 0 2
7... 2 1 Y - ~ - - iv) - ) - 2
80. 11a} -) -| o} -]; -] -}o]o-e] -] oe 1
Other percent 0) “) iv) - - - - Q - iv) - iv) )
Percent of earnings varies 6 1 - - - - -|o - -|o 1 4
Professional and administra-
tive
Total ... 66 1 2/0 a] 0 12 7 3 1 9} 34
Fixed percent of earnings a1 | 65 1 2/0 a 0) 12 7 3 1 e|. 2
Less than 50 0 10) r0) - - - - - - - - 0)
43 | 36 - - 31 - 2) 0) 0 - 2 7
23) 6} -| oO} Oo] -! 0 6 3 1 4 8
wl] 2] o 1 - -| 0 9 1 i) 1 4
4 1 - - - ) - ~ - ~ - 1 3
2 v) 0 - - - - cv) - iv) - - 2
7/0) -{ -) -] -{} -] =] oO] =) -] - 1
| 0 - - - - -1 0 - - - - -
Percent of earnings varies 9 1 - - - - - | 0 - - - 1 8
‘Technical and clerical
Total... ey) 0) 1/0 2} 14 5 4 2| wi se
Fixed percent of earnings es | 6] 0) 1] 0 a] 0 14 5 1] 18 | 27
Less than 50 ... © - - ~ - - - - - - a)
50 30| 30) - | - 2] - 210] 0] 0 2 9
60 22 16 - iv) iv) 1 - 4 3 1 1 9 6
66 1] 0 - - - - -|o | 0 - - - 1
67 al owl oo] o - -} 0 1 1 3] 0 1 4
70 3 1 - - Q 1) - ~ ) - - 1 2
75 5 2 - - ~ - - 0) - - - 2 3
80 1) 0 ~ ‘) - - - 0) ~ - - 1
Other percent .. 0 1) v) ~ - - - 0) - Q - - 0)
Percent of earnings varies . 7 2 - - - -1o0 - - 1 2 5
Production and service
Total ... 100 | 64 1 3] 0 26 al ou 5 2 3 9 | 36
Fixed percent of earnings 97 | 63 1 3/0 26 4a) 5 2 3 8} 34
Less than 50 .. 170) 0 - - - - - - - - 1
44) 34 2 23 2 2 1 1) 0 3| 10
a1 Ww 0) () 1 () 2 3 1 2 3 9
2 2 - - Q - 1 1 - - - -
a] 2] 0 1 - 1 1 G 1 - 1 1 9
5 3 1 - Q 1 1 Q 0 - 0 0) 2
+f) o} -] -} =f -f -]) Oy =f =] -4 0 1
1 - - - - - - - - - - - 1
thoat =f =F =f -f -fo}o-fo}] -foq. -
Percent of earnings varies ...... 3 1 - - - - -| 6 - -lo 1 2

* Less than 0.5 percent.
NOTE: Because of rounding, sums of individual items may not equal totals. Where applicable, dash indicates no employees in this category.

32



Table 55. Medical care benefits: Percent of full-time participants in contributory plans’ by type and amount of employ

contribution, medium and large firms, 1989—Continued

All plans Health maintenance organizations | __ Norhealth maintenance
organizations
Type and amount of contribution
Employee cover-| Family | Employee cover-| Family Employee cover-| Family
‘age coverage? age coverage” age ‘coverage’
Technical and clerical
Total .. 100 100 100 100 100 100
Flat monthly amount 78 80 76 7 78 81
Less than $5.00 4 i) 4 0) 4 1
$5.00-$9.99 8 3 10 3 8 3
$10.00-$14.99 15 3 13 3 16 3
$15.00-19.99 10 3 7 2 11 3
$20.00-$20.99 16 5 14 4 16 6
$30.00-$39.99 13 6 7 6 42 6
$40.00-§49.99 3 6 2 6 3 6
$50.00-$59.99 2 6 5 5 1 6
$60.00-$69.99 . Q 8 1 6 9) 8
$70.00-$79.99 iv) 7 e) 5 ro) 7
$80.00-$89.99 5 4 @ 10 6 3
$90,00-$99.99 - 4 - 3 - 5
$100.00-$124: 1 6 Q 5 1 6
$125.00-$149.99 0) 6 - 7 (i) 5
$150.00-$174.99 - 8 - 6 - 8
$175.00-$199.99 a) 1 - 1 iv) 1
$200.00 or greater - 2 - 4 - 2
Composite rate* 2 2 1 1 2 2
Amount varies by employee® 16 12 13 " 7 12
Amount varies by earnings e 1 - io) 1 1
Not determinable 6 7 "1 12 4 6
Production and service

Total 100 100 100 100 100 100
Flat monthly amount. a4 82 at 83 85 82
Less than $5.00 5 2 3 a) 6 3
$5.00-$9.99 9 6 11 3 8 7
$10.00-14.99 7 4 26 7 18 4
$15.00-$19.99 12 4 9 4 12 4
$20.00-$29.99 16 8 7 6 16 8
$30.00-$39.99 6 5 9 4 5 5
$40.00-849.99 .. 3 5 1 12 3 4
$50.00-$59.99 1 5 2 4 1 5
$60.00-$69.99 .. tv) 9 2 8 io) 9
$70.00-$79.99 .. iv) 4 a) 12 ro) 2
$80.00-$89.99 .. 10 5 1 3 12 5
$90.00-$99.99 .. - 3 - 8 - 2
$100.00-$124.99 .. @) 6 1 4 fo) 6
$125,00-$149.99 .. i) 4 - 2 () 5
$150.00-8174.99 . - 7 - 2 - 8
$175,00-$199.99 . v) ia) - 1 is)
$200.00 or greate - 2 - 3 1
Composite rate’ .. 4 3 1 3
Amount varies by employee’ 5 4 4 3 6 4
Amount varies by earnings .. 1 2 - ay 1 2
Not determinable ... 9 12 15 14 8 12

* Plans providing services or payments for services rendered in the
hospital or by a physician. Excludes plans that provided only dental, vi-

sion, or prescription drug coverage.

If the amount of contribution varied by either size or composition of
family, the rate for an employee with a spouse and one child was used.
For a small percentage of employees, the employee contributes the

same amount for single and family coverage.
3 Less than 0.5 percent.

* A composite rate is a set contribution covering more than one bene-
fit area, for example, health care and sickness and accident insurance.

Cost data for individual plans cannot be determined.

* Amount varies by options selected under a “cafeteria plan’ or bal-

ance of employer-sponsored reimbursement account.

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



Table 90. Defined benefit pension plans’: Percent of
full-time participants by provision for adjusting accrued
benefits for service beyond age 65’, medium and large firms,
1989

Tabie 91. Defined benefit pension plans:' Percent of
full-time participants in plans granting ad hoc postretirement
lump sum payments and annuity increases,’ medium and
large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and

Profes-
sional | Techni- | Produc-
and | cal and | tion and

Type of adjustment (aL ar: | adminis-| clerical | service Characteristics Ail par | adminis-| clerical | service
icipé trative | partici- | partici- ip trative | partici- | partici
partici- | pants | pants partic | pants | pants
pants pants
Total ... 100 100 100 100 Total 100 100 100

Without benefit increase . 1 90 88 93
No actuarial adjustmer
benefits for service past age

65... 1 90 88 93
Pension begins at age 65 even if

active e iv) 0) (a)

With benefit increase 9 10 12 7

Increased actuarially 5 6 7 4
Increased by percent per

additional year of service * 2 1 2 1
Actuarial increase offset by

benefit accruals © 2 3 3 2

‘Excludes supplemental pension plans.

® The Omnibus Budget Reconciliation Act of 1986 requires plan spon-
sors to continue benefit accruals for service beyond the plan's normal re-
tirement age. For noncollectively bargained plans, this requirement takes
effect for plan years beginning on or after January 1, 1988. However, col-
lectively bargained plans need not comply until the earlier of (1) the expi-
date of the collective bargaining agreement, or (2) the first plan year
beginning on or after January 1, 1990.

Less than 0.5 percent.

“ Additional service is included in the benefit formula, and the pension
is increased by a specified percent (not part of the benefit formula) for
each year the employee remains active.

© The pension is increased actuarially for tater retirement date or is in-
creased for additional service, whichever is greater.

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

101

With lump sum payment or ad hoc
Pension increases in the 1984-88

period 24 23 17 28
Ad hoc increases only .. 18 19 16 18
Lump sum payments only 2 2/0 2
‘Ad hoc increases and tump sum |

payment 4 2 1 7
Without lump sum payment or ad
hoe pension increases in the
1984-88 period 4 75 81 a
Not determinable 2 2 1 1

' Excludes supplemental pension plans.

2 Unscheduled increases in pension payments for employees retiring
prior to 1989.

* Less than 0.5 percent.

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



Table 112. Plan administration: Percent of full-time participants in selected employee benefit programs by type of plan j
sponsor, medium and large firms, 1989 :

Sickness and Long-term f i
Plan sponsor Health care Life insurance accident disability Defined benefit |
insurance insurance Bension 1
All participants i
100 100 100 100 100 |
98 98 82 100 94 i
2 1 1 e@ 4
- - 7 - 2 i
Employer association’ i) 19) - - - |
|
Professional and administrative
Total .. 100 100 100 100 100
Single employer 100 100 oT 100 99
Multiemployer' .. 0 - - 9) 1
Mandated benefits? .. - = 29 = i)
Employer association’ i) () - - - |
Technical and clerical i
Total 100 100 100 100 100
Single employer 99 99 75 100 98
Multiemployer’ .. (6) 1) © 0 1
Mandated benefits’ - - 25 - 1
Employer association’ 1 1 - - -
Production and service
Total .. 100 100 100 400 100
Single employer 97 98 87 100 89
Multiemployer' 3 2 2 a) 8
Mandated benefits® - - 1 0 8
Employer associatior io) 6 - - - i
* Individual employers in the same or in a related industry contributing _ ticipants were covered by Railroad Retirement Tier 2. |
a negotiated amount to a trust fund providing benefits for employees cov- * Band of small employers in a common trade or business, for exam-
ered under a collective bargaining agreement. ple, savings and loan associations. The plan sponsored by the associa-
? Less than 0.5 percent. tion is not negotiated with the employees.
® The majority of the participants with mandated sickness and accident
insurance benefits were covered by State temporary disability insurance NOTE: Because of rounding, sums of individual items may not equal
plans. The remaining employees were covered by the Railroad Un- totals. Where applicable, dash indicates no employees in this category.

employment Insurance Act. Mandated defined benefit pension plan par-

123 |


out—of_pocket expenses averaged $1,077 for an individual,
and $2,298 for a family.

Plans that required an annual deductible and placed a
maximum on out-of-pocket expenses covered 80 percent
of the participants subject to overall limitations. The sum
of these two items represents the total that the plan re-
quires an individual to pay for covered medical expenses in
acalendar year. In 1989, the annual deductible plus the
annual out-of-pocket expense maximum averaged $1,258
per individual.!*

Plans with overall limitations often place a ceiling on the
amount payable by the plan, usually a lifetime maximum.
In 1989, seven-tenths of the participants in plans with
overall limitations were affected by a lifetime maximum
only. A maximum of $1 million applied to more than one-
half of these participants. Other common maximum
amounts were $250,000 and $500,000, with the average of
all maximums just below $832,000. Plans that did not im-
pose a maximum on plan payments covered 21 percent of
the participants subject to overall limitations.

Hospital coverage

Nearly all health plan enrollees covered by the survey
had benefit provisions for hospital room and board
charges! (table 44), Twenty-eight percent of participants
with hospital room and board coverage were in plans in
which expenses were reimbursed for the full semiprivate
room rate for an unlimited number of days. Using the
semiprivate room rate as a basis for plan payments fur-
nishes enrollees some protection against rising hospital
costs.

Twenty-two percent of participants had hospital room
and board expenses covered at the full semiprivate room
rate for a limited period, followed by a percentage of the
semiprivate room rate, almost always 80 percent. (For 2
percent of the participants, coverage ceased after a speci-
fied number of days). Most of the remaining participants
were in plans where hospital room and board expenses
were covered at a percentage of the semiprivate rate, fre-
quently 80 percent.

Surgleal coverage

Virtually all participants had medical plans that based
payments for in-hospital surgery on the “usual, custom-
ary, and reasonable” (UCR) charges for the particular pro-
cedure performed.!© One-third of participants were cov-

\4 This average is slightly different from the sum of the individual aver-
ages because some participants have only an annual deductible or only
an annual maximum out-of-pocket expense limitation. The combined
average includes only those participants with both provisions.

15 4 small number of participants, who elected only dental or vision
care coverage (perhaps because they were covered by a spouse’s bene-
fits), were not covered for hospital expenses.

\6-The “usual, customary, and reasonable” charge is defined as being
not more than the physician’s usual charge; within the customary range
of fees charged in the locality; and is reasonable, based on the medical
circumstances.

42

ered for the full UCR charges, while another two-fifths
were covered for 80 percent of the UCR charges (tables 45
to 47).

When in-hospital surgery was not based on UCR
charges, it was covered according to a schedule establish-
ing a maximum amount payable for each procedure.
Charges exceeding the scheduled maximums, however,
were generally covered, subject to the plan’s overall de-
ductible and coinsurance.

Almost three-quarters of participants were in plans
where outpatient surgery was covered in an identical man-
ner to in-hospital surgery, whether in full, a percent of
UCR charges, or subject to a schedule of maximum pay-
ments. For those participants with different coverage for
outpatient surgery, outpatient services were often reim-
bursed at a higher coinsurance rate.

Three-fifths of all enrollees in plans with surgical bene-
fits had to satisfy a deductible for in-hospital procedures.
When outpatient surgery was needed, however, only two
in five of these participants had a deductible requirement.
Generally, when deductibles are not applicable for in—hos-
pital surgery, neither are they applicable for outpatient
procedures.

Second surgical opinion provisions were applicable to
almost three-fifths of participants with inpatient surgical
benefits. Three-fifths of these plan enrollees had incen-
tives for obtaining second opinions, generally applying
only to selected procedures. The most prevalent incentive
was to reduce the coinsurance rate if a second opinion was
not sought.

The medical care plans examined in the survey treated
maternity charges like other surgical charges. Twenty
percent of the participants were in plans that included in-
centives for deliveries in lower cost birthing centers, rather
than in hospitals. One-fifth of the participants were in
plans that did not provide maternity coverage for depen-
dent children, except where complications from pregnan-
cy developed.

Mental health coverage

Mental health coverage, though available to nearly all
participants, was commonly subject to special limitations
(table 48). Plans with mental health benefits having more
restrictive hospital coverage for mental illness than for
other ailments, covered 77 percent of participants in 1989,
this continues an upward trend in the percent of partici-
pants with such restrictions, from 71 percent in 1988 and
43 percent in 1982. Plans commonly limited the duration
of hospital stays (often to 30 or 60 days per year for mental
health care, compared to 120, 365, or unlimited days for
other illnesses) and sometimes imposed a separate, lower,
maximum on covered hospital expenses (such as a lifetime
maximum of $50,000 on all mental health benefits).

Even more restrictive was coverage for mental health
care outside the hospital (psychiatric office visits). Ninety-
two percent of participants were subject to special limits in


ly retirement, the benefit was based on the normal retire-
ment formula. Most of the remaining participants had
benefits based on the normal retirement formula prorated
to account for lower years of service at early retirement.
For example, employees retiring with 20 years of service at
age 55, who would have had 27 years of service if they had
worked to the plan’s normal retirement age of 62, would
receive benefits based on 74 percent (20 divided by 27) of
the normal retirement formula.

Once the basis for computing benefits is determined, the
benefit derived from that formula is reduced by a percent-
age (factor) for each year between the actual and normal
retirement ages. Ifa plan’s normal retirement age is 62, for
example, and the reduction factor is 6 percent, a person
retiring at age 59 would receive 82 percent of the normal
formula amount (100 percent minus 3 years times 6 per-
cent). In addition to the 18-percent reduction for early
retirement, the annuity in this example would be based on
fewer years of service and possibly lower earnings than at
age 62.

The reduction factor may be uniform or may vary by
age or service. Reduction factors that differed for each
year of early retirement, based on the employee's life ex-
pectancy at that age (actuarial reductions), were used in
plans covering 17 percent of participants with early retire-
ment opportunities: Other methods of reducing benefits
approximate an actuarial reduction. For example, for 32
percent of the participants, the reduction factor differed
for age brackets of several years instead of changing each
year. Half the participants had uniform reduction factors,
most commonly 3, 4, 5, or 6 percent for each year of early
retirement. In plans with a low uniform reduction, such as
3 percent per year, the employer is subsidizing some of the
early retirement benefit by making the reduction less se-
vere than if benefits were computed actuarially.

Nearly seven—tenths of all participants were covered by
plans permitting early retirement at age 55; generally, 10
years of service was required. If service requirements were
satisfied, 16 percent of all participants could retire earlier
than age 55. Many of these participants could retire with
reduced benefits at any age, generally after 30 years of ser-
vice.

The early retirement pension for 10 percent of partici-
pants was supplemented by additional monthly payments
if employees retired after meeting a specified age or
length-of-service requirement higher than the minimum
needed to retire. Plan sponsors include these supplemen-
tary benefits either to induce older workers to retire or as a
reward for long service. Supplements generally last until
Social Security benefits are payable. .

The survey also covered special incentives employers
may offer, outside of formal pension plan provisions, to
employees who retire within a specified time period.
These early retirement incentives, often called “open win-
dows,” provide a short period, usually a few months, for
employees to choose early retirement with some added ad-

vantage over regular pension plan provisions. Such pro-
grams are often used to achieve needed reductions in staff
without resorting to layoffs. Firms that offered at least one
early retirement incentive to eligible workers over the past
5 years covered 17 percent of defined benefit pension plan
participants.

” Most participants were in plans that offered just one
open window in the last 5 years. The following lists the
major incentives offered and the frequency with which
they were found. (It was common for more than one in-
centive to be offered as part of a single open—-window pro-
gram.*?)

Percent of participants in firms
offering an early retirement
incentive

25 to 40 percent

Incentive

Additional years of age and/or ser-
vice used in computing benefits.
Monthly supplements for aspecified
period or for life.

Continuation of the same health care
and life insurance benefits available
toactive employees (without benefit
reductions or changes in the amount
the retiree must contribute).

10 to 24 percent

No reduction in annuity due to its
early receipt.

Lump-sum payment at retirement

Less than 10 percent
. in addition to annuity.

Disability retirement

A career—ending disability may entitle an employee to a
pension before retirement age. If the disability satisfies the
plan’s definition of total disability, pension benefits often
begin immediately. When an employer provides other
sources of disability income, such as long-term disability
insurance, the disability retirement benefit might be de-
ferred until the other forms of income have ceased.
Eighty-—one percent of pension plan participants were cov-
ered by some type of disability retirement provision in
1989 (table 89).

Two-thirds of the blue-collar workers with disability
retirement coverage were in plans with immediate bene-
fits. In contrast, white-collar workers were more likely to
be in plans with deferred benefits. Workers with deferred
benefits were usually given long-term disability insurance
(LTD) benefits that typically provided 50 or 60 percent of
earnings at the time of disability; this was more than was
generally provided by pension plans with immediate dis-
ability retirement. Furthermore, most deferred retirement
benefits were greater than immediate pensions, primarily
bécause the time during which LTD benefits were paid was
typically added to an employee’s length of service for com-

32 For more information on early retirement incentives, see “Early Re-
tirement Incentives Offered to 24 Percent of Companies in 1986,”
Spencer's Research Reports, July 1987, pp.111.02.-1-10.


Table 2. Other benefits: Percent of full-time employees
eligible for selected employee benefits, medium and large

firms, 1989
Profes-
sional | Techni. | Predue-
Allem-| 2nd _Jeal and) ang
Employee benefit Mem" admin | clerical |, 26
PIOYeeS istrative employ-| orrvice
employ “cos” [emelor
ees
Income continuation plans:
Severance pay .. so | 54] 46) 27
Supplemental unemployment
benefits 5) 2| 2] 9
‘Transportation benefits:
Free or subsidized
‘employee parking . 90 85 86 94
Subsidized commu s| 7] 6| 3
Job-related travel
accident insurance 53) 69 / 60) 39
Gifts and cash bonus
Gifts .. 24 25 23 25
27 | 26 | 2/26
Financial and legal service:
Financial counseling 9 12 1 6
Prepaid legal services . 4] 2] 2] 5
Family benefits:
Employer assistance for child
care s| e6| 6] 3
Employer financial
assistance for adoption s| e] 6| 3
Eldercare 3] 4} 3| 2
Longsterm eare insurance 3} 3] 3] 2
Health promotion program
In-house infirmary « ae] 40 | 35 | 34
Wellness programs 23] 30] 2! 19
Employee assistance programs...| 49 | §7 | 50 | 44
Miscellaneous benefits:
Empoyee discounts sa] sa] 58) 52
Employer-subsidized
recreation facilities .. 2 | 36 | 26) 26
Subsidized meals..... 23| 20| 2| 16
Relocation allowance 36 | 68°) 29) 21
Education assistance:
Job related eo | at | 75] 59
Not job related 1) 2 | i! te

NOTE: Where applicable, dash indicates no employees in this cate-

gory.



Contents—Continued

5. Rest time: Minutes per day ...

6. Holidays and vacations: Average number of days
7

8.

'. Holidays: Number of days provided each year ....

. Holidays: Policy on holidays that fall on a regularly scheduled day off . .
9. Vacations: Amount provided at selected periods of service .
10. Vacations: Length of service required to take vacation .
11. Vacations: Unused leave policy .............0005
12. Personal leave: Number of days provided per year .
13. Funeral leave: Number of days available per occurrence .. .
14. Jury—duty leave: Number of days available per occurrence .
15. Military leave: Number of days available per year
16. Maternity and paternity leave policy
17. Unpaid maternity and paternity leave: Duration of benefits ..

Short-term disability coverage:
18. Participation in sickness and accident insurance plans and paid sick leave plans
19. Average short-term disability days available, and full-pay-equivalent days ....

Paid sick leave:

20. Type of provision ..

21. Provision .........

22. Average number of days at full pay by type of plan . .

23. Annual plans: Average number of days at full pay by accumulation policy and sickness and accident
insurance coordination ..... 2.6.0.6. c cece cece een teen e ete ene tence nee

24. Annual plans: Average number of days at full pay by sickness and accident insurance coordination

25. Annual plans: Unused sick leave policy and provisions ..............0 eee eeeeeeeeeeeen eens

Sickness and accident insurance:
26. Type and duration of payments
27. Percent—of-earnings formula by maximum weekly benefit .
28. Length-of-service requirements for participation . .

Long-term disability insurance:

29. Method of determining payment
30. Percent—of-earnings formula by maximum monthly benefit ..

31. Maximum disability income provisions by type and amount of maximum
32. Benefit waiting period
33. Duration of benefits
34. Length-of-service requirements for participation
35. Limitations on benefits for mental illness . .
36. Survivor benefits

Medical care:
37. Coverage for selected categories of care .
38. Fee arrangement and financial intermediary
39. Overall limitations-amount of deductible ...
40. Overall limitations—coinsurance ..............4+
41. Overall limitations—out-of—pocket expense limits
42. Overall limitations-sum of deductible and out-of-pocket expense limits .
43. Overall limitations-maximum benefit provisions
44. Hospital room and board coverage by type of benefit payments .
45. In-hospital surgical coverage by type of benefit payments ...
46. In-hospital surgical coverage by comparison with outpatient surgical coverage
47. Second surgical opinion provisions

vii



Chapter 5. Medical Care, Dental Care,

and Life Insurance

Along with paid leave, medical care and life insurance
are the most common employee benefits in medium and
large firms. Medical care benefits were provided to 92 per-
cent and life insurance to 94 percent of all full-time em-
ployees, while dental care was available to 66 percent of
employees. The extent of coverage was nearly identical
within each of the three occupational groups.

Medical Care

This section presents details of medical care benefits, in-
cluding how frequently particular services were covered or
limited. Other aspects examined are: financing arrange-
ments, cost containment features, employee contributions
to plan premiums, requirements for plan participation,
and coverage for retired or laid-off workers.

Coverage of selected categories of medical care

Virtually all of the participants in health care plans had
coverage for the major categories of medical care, such as
hospital room and board, care by physicians and surgeons,
X-ray and laboratory services, and out-of-hospital pre-
scription drugs (table 37). With relatively few exceptions,
coverage included physical and mental health conditions
and substance abuse treatment.

Lower cost alternatives to hospital care were also signif-
icant. Three out of four medical plan participants had pro-
visions covering home health care, and four out of five had
coverage in extended care facilities. Hospice care, for the
terminally ill, was available to approximately two-fifths of
medical plan participants.

Among benefits less commonly provided were vision
care (covering 35 percent of the participants), hearing care
(26 percent), and routine physical exams (28 percent). Un-
like most other employee benefits, there were few differ-
ences in health care provisions among employee groups.

Funding arrangements

In 1989, three-fourths of all health plan participants
were covered by a fee-for-service medical plan (table 38.)
These plans pay for specific medical procedures as ex-
penses are incurred. Arrangements for financing plan
benefits varied widely: Self-insured plans (where the plan

39

sponsor—typically the employer—bore the financial risk
for making plan payments) covered 43 percent of fee-for-
service participants, compared to 34 percent in commer-
cially insured plans, and 19 percent in Blue Cross—Blue
Shield plans. The remainder generally had combined
sources of benefits. An increased incidence of self-insured
plans has been observed in recent years. Reasons for this
may include reduced administrative costs for self-insur-
ance, and the fact that some States charge a premium tax
on insured plans.

Seventeen percent of health care participants covered by
the survey were enrolled in health maintenance organiza-
tions (HMO’S). (See chart 2.) HMO’s agree to provide a pre-
scribed set of benefits to enrollees for a fixed payment. The
HMO thus bears the risk associated with the assessment of
need and delivery of care.!!_ HMo’s are classified in this
survey as either the group/staff type, with services pro-
vided in central facilities, or as individual practice associ-
ations, with providers working from their own offices.
The following tabulation shows the percent of HMO partic-
ipants by type of plan:

Percent of participants
. 44
53
ow 4

Five percent of participants in health maintenance or-
ganization plans had an open enrollment option. In such
plans, an enrollee has the ability to utilize health care pro-
viders outside of the HMO, although reimbursement of ex-
penses is less than if the HMO providers are used.

Preferred provider organizations (PPO’s) covered 10
percent of medical care participants in 1989, up from 7
percent in 1988 and 1 percent in 1986. Preferred Provider
Organization plans pay a higher benefit for services ren-
dered by designated health care providers (such as hospi-
tals and physicians), although participants are free to
choose any provider. Providers agree in advance to a given

Group/staff
Individual Practice Association
Combination

1! Purther details on HMO’s may be found in EBRI Issue Brief #87,
“Managing Health Care Costs and Quality”, February 1989. See also
Allan Blostin and William Marclay, “HMO's and Other Health Plans:
Coverage and Employee Premiums,” Monthly Labor Review, June
1983, pp. 28-33.



Table 62. Dental care benefits: Percent of full-time participants by extent of coverage for selected procedures, medium and

large firms, 1989-—-Continued

‘Type of dental procedure
Extent of coverage a . 5 . 7
Beane | Denies | Filings Prise) Inlays | Crowns |Periodontaly Endodon- | prosthetics | Onogor
Technical and clerical
Total’ .. 100 100 100 100 100 400 100 400 100 100
Scheduled cash allowance 8 8 14 14 413 13 13 14 14 -
Incentive schedule® 1 1 1 1 (7) iv) 1 1 ie) -
Subject to copayment® 2 2 2 3 4 3 4 3
Percent of usual, cust
reasonable charge 88 89 82 80 a & 7 80 75 61
- - - - ) - - 1 1
1 2 7 8 54 55 10 87
- - - - 0 Oo - Q iy)
ia) iv) 1 1 5 6 1 1 5 1
1 2 4 3 3 3 4 3 2 1
0) 1 6 6 2 2 6 6 1 1
20 22 51 51 6 6 46 50 8 1
0) 1 3 2 1 1 3 3 i) -
3 3 2 2 1 1 2 2 0) 0
61 58 8 7 2 2 5 G 1 8
iv) iy) i) iv) “ “ oO iv) iv) iv)
Subject to overall plan provisions
only? .. Qo iy) iv) oO iv) “ iv) iv) oO -
Not covered 1) 1 1 1 8 5 36
Not determinable - - - - oO - - - - -
Production and service
100 100 100 100 100 100 100 100 100
12 12 15 16 15 15 16 16 14
Incentive schedule* iy) oO 0 iy) iv iv} iv) 0. iv)
Subject to copayment 1 1 2 3 3 4 3 3 3
Percent of usual, customary, and
reasonable charg 87 87 a2 79 76 77 7 73 7
Less than 60 - - - ivy o - = 9)
50 2 2 7 7 46 48 9 7 63
- - - - “ ) - - 6
©. 0 1 1 4 4 1 1 4
1 1 3 3 2 2 3 3 2
1 1 6 6 2 2 6 6 2
22 23 42 41 8 8 38 40 4
1 4 7 5 4 4 7 7 tv)
4 5 6 6 5 5 6 6 1
55 50 10 10 4 4 6 9 3
Discounted benefit® ) iy) oO iv) oO o i) “ oO
‘Subject to overall plan provisions
iy) rv) 1 1 1 1 1 1 1 -
0) ) 0 1 5 3 3 2 4 34
Not determinable - - - - 0 - - - - ~

* Excludes plans that limited coverage to accidental injuries, removal of
impacted wisdom teeth, or repair of jaw.

2 Participants were included as having coverage for orthodontia in
cases where benefits were limited to children.

® Coverage may be also subject to maximum and deductible provisions.

* Less than 0.5 percent.

5 Reimbursement arrangement in which the percentage of dental ex-
penses paid by the plan increases if regular dental appointments are
scheduled.

70

© Participant pays a specific amount per procedure and plan pays alll re-
maining expenses.

” Includes plans that paid the full cost.

* Benefits provided at a discount if obtained from an approved provider.

® Reimbursement arrangement is the coinsurance provision used for all
covered expenses under the plan.

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



Table 75. Life insurance: Percent of full-time participants
by effect of retirement on basic life insurance coverage,
medium and large firms, 1989

Table 76. Life insurance: Percent of full-time participants
by length-of-service requirements for participation,’ *
medium and large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and

a All par-
Effect of retirement adminis-| clerical | service
ticipants partici | partici.
Pants Pants:

Protes-
sional | Techni- | Produc-
and | cal and | tion and
adminis-| clerical | service
trative | partici- | partici
partici. | pants | pants
pants

Alt par-

Length-of service requirement | Prt,

Total .. 100 100 100 100
Insurance continues’ .. 42 41 43 42
Continues for life .. ay 40 42 41
Continues in full 4 3 3 4
Reduced during retirement .. 38 37 39 37

Once 23 20 23 26

More than once 15 7 16 12

Ceases during retirement ® 1 ie) i)
Provision not determinable 6 i) 1 6
Insurance discontinued immediately ., 58 59 87 58

' Includes plans in which coverage is fully paid by retiree.
? Less than 0.5 percent,

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

9

Total .. 400 | 100 j 100 | 100
With service requirement 51 44 a7 59
1 month 14 13 13 15

2 months .. 8 4 4 12

8 months .. 18 15 20 19
4-5 months 1 @ is) 1

6 months 8 11

9 6
7-11 months. o) (a) ca) a)
2 2 2

1 year .. 2
Over 1 year @ is) i) 10)
Without service requirement 46 56 49 39
Service requirement not
determinable 3 2 4 2
Not applicable—plan not
available to new employees...) () to) io) i)

‘- 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 fro-
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. Where applicable, dash indicates no employees in this category.



Employee Benefits in Medium
and Large Firms, 1989

U.S. Department of Labor
Elizabeth Dole, Secretary

Bureau of Labor Statistics
Janet L. Norwood, Commissioner

June 1990

Bulletin 2363

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402



Table 95. Defined benefit pension plans:' Percent of
full-time participants by type of postretirement survivor
annuity, medium and large firms, 1989

Table 96. Defined benefit pension plans:' Percent of
full-time participants by type of preretirement survivor
annuity, medium and large firms, 1989

Profes-
Profes- i i
sional | Techni- | Produc- Sore | car ton an
_| and | cal and | tion and it All par- inis-
Type of annuity for surviving spouse | Al! P@'- | adminis-| clerical | service Type of annuity for surviving spouse | rcspants|eGmInI| clerical | service
ticipants | 20% d ative | partici | partici
trative | partici- | partic- partici: | ‘pants } pants
partici- | pants | pants pants | Pans |
pants:

Total ... 100 | 100 100 100

Spouse's share of joint-and-survivor

annuity’ only . 90 93 93 86
50 percent of retiree’s pension...) 23 18 23 26
51-99 percent of retiree's

pension 3 5 2 3
100 percent of retiree’s pension.| 2 2 3 1
Alternative percentages at
retiree's option® 62 70 64 56
Spouse's share of joint-and-survivor
annuity plus portion of retiree’s
pension ... 1 1 1 2
Portion of retiree’s accrued pension
only .. 9 6 7 4

* 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. Employees and their spouses are required to
waive the spouse annuity in writing if they desire a pension during the em-
ployee’s lifetime only or another option offered by the plan, such as guar-
antee of payments for a specified period.

* “Alternate percentages were usually 60, 67, or 100 percent.

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

105

Total. 100 | 100 | 100

Equivalent of joint-and-survivor

annuity? ... 73 78 74 70
Based on early retirement® 72 76 73 68
‘50 percent of employee
pension .. 62 63 63 61
At extra employee cost’ 8 9 8 8
51-99 percent of employes
pension .. 5 6 4 5
At extra employee cost* @ 1 iV) 1
100 percent of employee
pension 2 3 4 1
At extra employee cost' .. iv) iw) ° -

Alternative percentages of
pension at employee's
option® 3

At extra employee cost.

Based on normal retirement’ .. 1 2 1 1
Portion of accrued employee benefit] 25 20 25 28
Reduced for early
retirement 12 8 8 16
Unreduced for early retirement...) 12 9 14 12
Based on service projected to
normal retirement date .. 2 3 2 1
Other annuity® 2 2 1 2

+ Excludes supplemental pension plans.

? The spouse annuity is computed as if the employee ‘had retired with a
joint-and-survivor annuity. That is, the accrued pension is first reduced
because 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.

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

* Less than 0.5 percent.

5 Alternative percentages were usually 50 or 100 percent.

7 Survivor annuity is based on the benefit the employee would have
received if eligible for normal retirement on the date of death.

* Includes annuity based on a dollar amount formula or percent of
earnings.

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



table 1). In this example, 22 percent of employees are in
plans that pay for eyeglasses (.68 X .35 X .92).

Tables 6, 19, 22-24, 57, 71, and 85 differ from other
tables because they display average benefit values rather
than percentages of workers. These tables present the av-
erages for all covered employees; calculations exclude
workers without the benefit.

Survey response

The following summary is a composite picture of the es-
tablishment responses to the survey:

Number of establishments

In sample 1,970
Out of business and out of scop: 28
Refusing to respond ....... 291
Nonresponse other than refusal 4
Responding fully or partially . . 1,647

There are three procedures used to adjust for missing
data from partial schedules and total refusals. First, impu-
tations for the number of plan participants are made for
cases where this number was not reported (from 2 to 8 per-
cent of participants in medical and dental care, insurance,
and retirement and capital accumulation plans and less
than 1 percent of participants in paid leave plans.) Each of
these participant values is imputed by randomly selecting
a similar plan from another establishment in a similar in-
dustry, geographic region, and establishment size. The
participant rate from this randomly selected plan is then
used to approximate the number of participants for the
plan which is missing a participation value in an establish-
ment which has provided only a portion of the data re-
quested.

Second, imputations for plan provisions are made where
they are not available in a partially responding establish-
ment. These plan provisions are imputed by randomly se-
lecting a similar plan from another establishment in a simi-
lar industry, geographic region, and establishment size.
The plan provisions from this randomly selected plan are
then used to represent the plan which is missing plan pro-
vision data. (This was done for about 3 percent of partici-
pants in sickness and accident insurance plans, 20 percent
of medical and dental participants, 30 percent of long-
term disability insurance participants, 35 percent of retire-
ment and capital accumulation plan participants, and 40
percent of life insurance plan participants. Imputations
were done for less than 1 percent of the participants in paid
leave plans.)

For other forms of missing data (totally unusable estab-
lishments and refusals), a weight adjustment is made using
the sample unit employment. This technique assumes that
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 establish-
ments together which are homogeneous with respect to the
characteristics of interest. In most cases, these cells are
the same as those used for sample selection.

128

Survey estimation methods

The survey design uses 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 is modified to account for a
weight adjustment factor developed during the adjustment
for nonresponse. The general form of the estimator for a
population total is:

Yj
Y=
i

IMs

1 P
where n = sample size

Y; = value for the characteristics of the it" unit
P; = 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, fj, developed
during the adjustment for nonresponse, is:

n’ f¥j

where n’ = number of responding units
fj = weight adjustment factor for the it" unit.

Appropriate employment or establishment totals are
used to calculate the proportion, mean, or percentage that
is desired.

Reliability of estimates

The statistics in this bulletin are estimates derived from
asample of 1,647 responding establishments, rather than
tabulations based on all of the approximately 109,900 me-
dium and large establishments within the scope of the sur-
vey. Consequently, the data are subject to sampling errors,
as well as nonsampling errors.

Sampling errors are the differences that can arise ‘be-
tween results derived from a sample and those computed
from observations of all units in the population being stud-
ied. When probability techniques are used to select a sam-
ple, as in the Employee Benefits Survey, statistical mea-
sures called “standard errors” can be calculated to
measure possible sampling errors.

This evaluation of survey results involves the formation
of confidence intervals that can be interpreted in the fol-
lowing manner: Assume that repeated random samples of
the same size were drawn from a given population and an
estimate of some value, such as a mean or percentage, was
made from each sample. Then, the intervals described by
one standard error below each sample’s estimate and one
standard error above would include the population’s value
for 68 percent of the samples. Confidence rises to 90 per-
cent if the intervals surrounding the sample estimates are



Contents—Continued

Page
Coverage for retired or laid-off workers 11.0.6... 000s ces e cence reece nett eect eee ene e ences 45
Dental care ... 45
Life insurance . 46
Chapter 6. Defined benefit pension plans «22.26... 66.0 sees cece een e eee eee e eee e nen ete ee ee eres 80
Benefit formulas : --. 80
Private benefits and Social Security payments 81
Maximum benefit provisions . 81
Replacement rates .. 81
Normal retirement . . 83
Early retirement 83
Disability retirement 84
Postponed retirement .. 85
Postretirement pension increases 85
Vesting ...... 60.6. e cece reece 85
Postretirement survivor benefits ... 86
Preretirement survivor benefits . 86
Employee contributions . 87
Participation requirements 87
Chapter 7. Defined contribution plans . 107
Cash or deferred arrangements . . 107
Savings and thrift plans . 108
Profit-sharing plans .... 110
Participation and vesting ............+0eese eee ee - 10
Chapter 8. Plan administration .. - 121
Plan sponsor ....-....---0++5 . 121
Plan financing .....-..- 260s eee e erence e eee . 11
Flexible benefits plans and reimbursement accounts .. . 121
Charts:
Medium and large firms:
1. Short-term disability benefits: Percent of full-time white- and blue-collar employees, 1989 ....... 19

2. Medical care benefits: Percent of full-time participants by type of fee arrangement, 1986 and 1989. 40
3. Medical care benefits: Percent of full-time participants in plans with deductibles by selected

amounts, 1980-89 . 2.6.66. cece erect eee een tener ener e nett nett nett nee 40
4. Defined benefit pension plans: Percent of full-time white- and blue-collar participants
by provision for integration with Social Security benefits, 1989 ........ 6... se este e sere eens 82

5. Defined benefit pension plans: Average replacement rates including and excluding

Social Security payments, 1989
6. Savings and thrift plans: Percent of full-time participants by availability of loan provisions,

1985-89 ...
7. Flexible benefits plans and reimbursement accounts: Percent of full-time employees eligible,
V9B6-B9 cc eee ene eee Een nnn enn n enn nen E eee e ene nee 122
Tables:
1. Summary: Participation in employee benefit programs .. 4
2. Summary: Eligibility for other benefits 5
Work schedules:
10

3. Number of hours scheduled per week ........ 00. cece eee t eee eee eee teen ete e ence e ene

Paid time off:
4. Lunch time: Minutes per day .... 20.00.00 cece eee cence eee e een ete eee teen ee 10

vi



Table 97. Defined benefit pension plans:' Percent of
full-time participants by age and length-of-service
requirements for participation,’ medium and large firms,

1989
Profes-
sional | Techni- | Produc-
; and | cal and | tion and
Age and ee a pats |@dminis-| clerical | service
pl ‘cipants | ‘trative | partici- | partici-
partic | pants | pants
pants
Total 100 | 100 | 100 | 100
Plan participation available to new
employees w| 100 | 100 | 100 | 100
With minimum age and/or
service requirement 65 67 ac 58
Service requirement only 26 25 25 26
3 months oF less... 1 1 1 1
4-5 months iv) iv) 19) 1
6 months 2 2 2 1
1 year 19 21 20 18
2 years oO oO 19) =
3 years o i) oO oO
Over 3 years 3 2 2 4
‘Age 20 or fess 2 2 3 1
No service requiremer 1 1 1 1
1-11 months of service 0) ) 1 v)
1 year of service .. ) 1 1 io)
Over 1 year of service ro) to) “0 ~
Age 21° . 35 37 44 29
No service requirement 3 3 7 1
4-6 months of service . 1 “) iV) 1
7-11 months ... i) 0 O QO
1 year of service ..... 31 33 36 27
Age 22 or older ......~ 2 3 3 2
1 year of service .... 2 3 3 2
Without minimum age and/or
service requirement 35 33 25 42
Participation not available to new
employees oO oO oO oO

* Excludes supplemental pension plans.
? Excludes administrative time lags.

* if a plan had alternative participation requirements, one of which was
service only, the service only requirement was tabulated.

* Less than 0.5 percent.

* The Internal Revenue Code requires that nearly all plans must allow
participation to fulltime employees who have reached the age of 21 and
who have completed one year of service. Plans that provide immediate
vesting of accrued benefits may require up to three years. Church plans

are exempt from the Internal Revenue Code.

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

tals. Where applicable, dash indicates no employees in this category.

106



Table 23. 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, 1989

Protes- Profes-
sional | Techni.| Produce sional {Techni | Produc:
All par-| and eal and) 20% and |eal and} 209
ftom tici- | admin- | clerical | tem admin- | clerical | Nice
pants [strate part |, pants [istrative| partic | Price
partici- | pants partici- | pants
pants pants pants Pants
At 4 year of service: [At 15 years of service:
Cumulative plan 91] 103) 94) 7.5|/ Cumulative plan 135| 152] 131| 122
With sickness and accident With sickness and accident
insurance .. as| 98| 97| 67 insurance ..... | 128] 155} 139] 104
Without sickness and accident Without sickness and accident
insurance .. 94; 104) 93] 81 insurance 138] 181| 128| 139
Noncumulative plan 214] 31.3| 20.9] 11.1]  Noncumulative plan .. 3a2/ s6s| 405] 194
With sickness and accident With sickness and accident
insurance | 10.0] 159} 105] 60 insurance ... 209] 379) 221) 93
Without sickness and accident Without sickness and accident
insurance 283| 378/ 263) 161 insurance 643] 498| 294
At 5 years of service: JAt 20 years of service:
‘Cumulative plan 112| 126| 112] 9.7|| Cumulative plan . 137| 155| 132| 125
With sickness and accident With sickness and accident
insurance 127| 122] 35 ingurance 130| 158) 141] 103
Without sickness and acciden Without sickness and accident
insurance 114] 126} 109| 107 insurance 141} 153| 129] 142
Noncumulative plan 29.5 42.9 29.2 15.1 Noncumulative plan 41.2 59.3 42.5 20.5
With sickness and accident With sickness and accident
i 155| 271] 168] 74 insurance 225| 40.7| 237) 104
Without sickness and accident
ingurance .. 36.0} 496) 956| 228 insurance ... 625] 671| 521] 309
At 10 years of servi |At 25 years of service:
Cumulative plan 132| 149] 130/ 11.7] Cumulative plan . 138] 155| 133) 126
With sickness and a& With sickness and accident
insurance ... 12.7 15.1 143 97 insurance: 13.2 16.0 14.2 10.5
Without sickness and accident Without sickness and accident
insurance .. 135| 148| 126] 193 insurance 141) 153] 129] 142
Noncumulative plan 36.2] 528] 373] 174] Noncumulative plan 422] 608| 434) 212
With sickness and accident With sickness and accident
insurance 193| 351| 205| 84 insurance .... 235| 424| 247| 108
Without sickness and accident Without sickness and accident
insurance 465] 603| 458; 264 insurance 536| 685| 529] 316

* Paid sick leave plans with a specified number of days available

each year.

Per disability plans were excluded from this table because

(1) only a small percentage 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 employee to cany over and
accumulate unused sick leave from one year to the next year. Instead,

the number of days of paid leave under a per disability plan is renewed
for each illness of disability after the employee returns to work for a
specified period. Data on per disability plans are presented in table 22.

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

27

|
i
|
|



Act (ERISA), some variations exist as to when this occurs.
Asa result of the Tax Reform Act of 1986, however, plan
sponsors adopted shorter vesting schedules in 1989. For
example, 50 percent of the participants in defined benefit
pension plans had to complete 5 years of service before
benefits were guaranteed (cliff vesting), up substantially
from 5 percent reported in 1988. In contrast, the number
of participants in plans requiring 10 years of service for
cliff vesting declined from 77 percent in 1988 to 38 percent
in 1989.

Generally, participants accrued years of vested service
regardless of age, although about one-sixth were affected
by the plan sponsor’s right to exclude years of service be-
fore a specified age in determining vesting eligibility. Par-
ticipants not in plans with cliff vesting generally were cov-
ered by a graduated vesting provision, which increased the
portion of guaranteed benefits as years of service in-
creased.

Unreduced vested pension payments begin at the plan’s
normal retirement age, based on the benefit formula in ef-
fect when the employee left the plan. As an alternative,
terminated and vested participants may receive a reduced
pension prior to normal retirement age if the participant
had satisfied the early retirement service requirement be-
fore leaving the plan.

For terminated and vested employees who wish to re-
ceive a pension beginning prior to normal retirement age,
ERISA requires the benefit to be at least the actuarial equiv-
alent of what would have been received starting at age 65.
The actuarial equivalent benefit is a reduced amount de-
termined by the life expectancy at the age that pension
payments begin. Although under ERISA the reduction fac-
tor used in determining the pension for an employee no
longer actively participating in a plan can be more severe
than for early retirement, the same factor was used in plans
covering 57 percent of the participants with early retire-
ment provisions. Where reductions differed, it was most
common to provide actuarial reductions to deferred vested
benefits, eliminating the subsidy employers provide to em-
ployees choosing early retirement.3¢

Postretirement survivor benefits

ERISA also requires defined benefit pension plans to
make benefits available in such a way that at least 50 per-
cent of the retiree’s payments continue to the spouse after
the retiree’s death (table 95). When this type of pension—
called a joint-and-survivor annuity—is paid, the em-
ployee will generally receive a lower benefit during retire-
ment to account for the likely increase in the length of time
payments are made. When the retiree dies, a pension bene-
fit will be payable for the life of the surviving spouse. All

36 For additional details on plan vesting requirements, see Avy D.
Graham, “How Has Vesting Changed Since Passage of Employee Re-
tirement Income Security Act?,” Monthly Labor Review, August 1988,
pp. 20-25.

86

defined benefit pension plan participants had joint-and—
survivor annuity options available to them in 1989.37

Joint-and-survivor annuities are based on an actuarial
or arithmetic reduction of the employee’s pension. About
one-fourth 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. Three—
fifths of participants had a choice of two alternative per-
centages or more (frequently 50, 67, and 100 percent) to be
continued to the spouse, with corresponding reductions in
their annuities.

Asan alternative to joint-and-survivor annuities, 9 per-
cent of participants were in plans providing a surviving
spouse with a portion of the retiree’s benefit. In these
plans, the spousal annuity is close to what a 50-percent
joint-and-survivor annuity might provide, but there is no
reduction to the employee’s pension to account for survi-
vor benefits.

Preretirement survivor benefits

All defined benefit pension plan participants also had
survivor benefits available in case the employee died before
retirement (table 96). Participants generally had to be
vested before such benefits were available. For 73 percent
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 with a joint-and-sur-
vivor form of payment in effect. Most survivor pensions of
this nature were based on an early retirement benefit and,
aside from the joint-and-survivor reduction, were pro-
vided at no cost to the employee. However, for 9 percent of
participants (down from 24 percent in 1980), preretire-
ment joint-and-survivor protection involved an extra cost
to the employee and was available only if elected. The cost
was usually paid by the employee through a small deduc-
tion in the pension ultimately payable to either the em-
ployee or the surviving spouse.

Most of the remaining 27 percent of pension plan partic-
ipants generally had a preretirement survivor annuity cal-
culated as a portion of the employee’s accrued benefit (the
benefit earned as of the date of the employee’s death, with-
out a joint-and-survivor reduction). Ifan active employee
dies after completion of the vesting requirement, a typical
survivor would receive an annuity equal to 50 percent of
the employee’s accrued benefit to date. Payments may be
reduced by the early retirement adjustment, and begin
when the employee would have reached early retirement
age. If the employee lives to become eligible for early re-
tirement, the survivor benefit in many cases switches to the
equivalent of a 50-percent joint-and-survivor benefit cal-
culated as if the employee had retired on the day of death.
(Where provisions changed based on age of the employee,

37 Survivor benefits are discussed in more detail in Donald Bell and
Avy Graham, “Surviving Spouse’s Benefits in Private Pension Plans,”
Monthly Labor Review, April 1984, pp. 23-31.



ings. The remainder had additional earnings included in
the benefit calculation, such as overtime pay and'shift dif-
ferentials.

Most plans that did not use a percent—of-earnings bene-
fit formula specified a dollar amount to be paid for each
year of service, such as $20 monthly, which, after 30 years
of service, yields a pension of $600 a month. Dollar-
amount formulas applied to nearly one-fourth of pension
plan participants. While the dollar amount in these for-
mulas sometimes varied with an employee's earnings or
service, the predominant method was to multiply a uni-
form (single) dollar amount by years of service. Uniform
amounts credited per year averaged $20 a month, an in-
crease of nearly $2 per year over the 1988 average.

The basis of pension payments differed sharply by em-
ployee group. While a large majority of white-collar par-
ticipants were provided earnings—based pensions, dollar—
amount formulas applied to nearly two-fifths. of the
blue-collar participants.

Two additional types of defined benefit pension plan
formulas accounted for the remaining participants. Per-
cent—of—contribution formulas specify a periodic contri-
bution by an employer, and occasionally by an employee,
toa plan. Benefits are a percent of total contributions, for
‘example, 1 percent of total contributions per month. If ca-
reer contributions totaled $40,000, monthly pension bene-
fits would equal $400. Similarly, cash account pension
plans specify an employer contribution and a rate of inter-
‘est on that contribution. Benefits are computed as a per-
cent of each employee’s account balance. While both types
of pension formulas have features that resemble defined
contribution plans, the fact that a certain level of benefit is
guaranteed by the employer leads to their classification as
defined benefit plans by the Internal Revenue Service.

Thirty-eight percent of all pension plan participants
were eligible to receive benefits from either primary or
alternative formulas, whichever was greater. Alternative
‘formulas were often included to provide at least a
minimum level of benefits for persons with short service or
low earnings. For example, a plan may have a primary
formula of 1.25 percent of average career earnings times
years of service, and an alternative formula of $15 a month
(or $180 a year) for each year of service. In this case, the
alternative formula would provide a higher benefit for
persons with average career earnings of less than $14,400 a
year.

Private benefits and Social Security payments

Employers providing private retirement plans also
Share the cost of Social Security coverage equally with
their employees. Because many plan sponsors feel that pri-
vate pension and Social Security benefits should not be du-
plicative, formulas for calculating private pensions often
contain an offset provision under which part of the Social
Security pension is subtracted from the annuity (table 83).

81

Social Security offsets are generally applied immediate-
ly upon retirement, whether or not the retiree is eligible for
Social Security benefits. (Only 7 percent of participants
were in plans that delayed-imposition of the Social Securi-
ty offset until Social Security payments begin.) Other
plans coordinate with Social Security through “excess”
formulas that apply lower pension benefit rates to an em-
ployee’s earnings below a specified level (either the Social
Security taxable wage base—usually the career average—
or a dollar amount equal to a past taxable wage base).

Benefit formulas were “integrated” with Social Security
for 63 percent of all pension plan participants. Terminal-
earnings formulas of integrated plans tended to adopt the
offset approach, while career—earnings formulas tended to
incorporate the excess approach. Dollar-amount formu-
Jas were rarely coordinated with Social Security; blue~col-
lar employees, therefore, were less likely to have integrated
benefits. (See chart 4.)

Maximum benefit provisions

The Employee Retirement Income Security Act of 1974
(ERISA) and subsequent amendments place ceilings on the
size of annual pensions from defined benefit plans. These
restrictions largely affect only highly compensated em-
ployees. Many plans, however, have provisions that re-
strict benefit levels for all participants. For example, 37
percent of participants were in plans that limited the num-
ber of years of service included in benefit computations;
maximums of 30, 35, or 40 years were most common. For
6 percent of the participants, annual pensions (usually in-
cluding Social Security payments) could not exceed a spe-
cified percent of average annual terminal earnings, or a
specified dollar amount (table 84).

Finally, 4 percent of participants were in defined benefit
pension plans that were offset by payments from a defined
contribution plan. These defined benefit plans were in-
tended to provide a “floor” of protection below which re-
tirement benefits could not fall. They generally were coor-
dinated with a profit sharing plan, and only provided
benefits when the profit sharing benefit did not yield the
guaranteed floor of protection.

Replacement rates

A commonly used indicator of a pension benefit is the
portion ofa retiree’s final year’s earnings that is “replaced”
by the pension. To calculate replacement rates for 1989
defined benefit pension plans, the maximum private bene-
fit under each surveyed plan, not reduced for early retire-
ment or joint-and-survivor annuity, was determined un-
der several assumed combinations of final annual earnings
and years of service. These benefit levels were then ex-
pressed as percents of earnings in the last year of employ-

2° For a comprehensive analysis of formulas with the Social Security
integration characteristics, see Donald Bell and Diane Hill, “How So-
cial Security Payments Affect Private Pensions,” Monthly Labor
Review, May 1984, pp. 15-20. :



of vacation at 10 and 20 years of service, were included in
the count of regular vacation time.

Virtually all employees covered by vacation plans had
to work a specified period of time before being able to take
a vacation. The most common length-of-service require-
ment was 6 months for white-collar participants and 1
year for blue-collar participants.

The survey also covered carryover and cash-in provi-
sions for unused vacation time. Twenty-four percent of all
workers covered were allowed to carry over at least some
of their unused vacation days into the next year; 10 percent
could cash in some or all of their vacation days at the end
of the year; and 7 percent had both cash—in and carryover
provisions. The majority, 56 percent, lost vacation days
that were unused at the end of the year. White-collar
workers were more than twice as likely to have carryover
provisions than blue-collar workers who, in turn, enjoyed
a similar advantage in cash-in provisions.

Paid personal leave

Formal personal leave, which allows employees to be
absent from work with pay for a variety of reasons not cov-
ered by other specific leave plans, was provided to 22 per-
cent of the employees (table 12). Twenty-nine percent of
the white-collar employees received personal leave, twice
the proportion of blue-collar employees having this bene-
fit. Most commonly, employees provided personal leave
were eligible for 1 to 5 days; the average was 3.1 days per
year. A few employees, primarily white-collar, were pro-
vided as much personal leave as needed. The survey did
not cover the extent of informal personal leave.

Paid funeral leave, jury-duty leave, and military
leave

At least 80 percent of the employees in each occupation-
al group were eligible for paid leave to attend funerals of
family members (table 13). Just over nine-tenths of eligi-
ble employees received a set number of days per occur-
rence, averaging 3.3 days. Averages were uniform among
the occupational groups.

Nearly one-fifth of participants were in plans where the
number of days off varied by family relationship (e.g.,
mother, sister) to the deceased. These workers were in-
cluded in the count of workers having a set number of
days; the maximum number of days off was reported for
each plan that included this relationship provision. For
some employees who are not covered by a separate funeral
leave plan, employers may provide an informal benefit or
allow employees to use other types of paid leave, such as
paid sick leave days, to attend a funeral. (See chapter 4.)

Ninety percent of workers were eligible for paid leave
while serving as a juror (table 14). Paid time off for jury
duty was usually provided “as needed”; employer pay-
ments commonly made up the difference between the em-
ployee’s regular pay and the court’s jury allowance.

Military leave, providing pay for absence from work to
fulfill military training or duty commitments, was avail-
able in establishments employing 53 percent of the em-
ployees (table 15). The most common provision was 2
weeks off per year, but 12 percent of the workers were in
establishments providing military leave as needed. For
workers with a specified number of days off, military leave
averaged 11.9 workdays per year. Pay for military leave
was either regular pay or the difference between regular
pay and military pay.

Parental leave

Unpaid maternity leave was available to 37 percent of
employees; 18 percent were eligible for unpaid paternity
leave (tables 16 and 17). Three percent of the workers had
paid maternity leave and 1 percent had paid paternity
leave coverage. Parental leave plans were defined by BLS
as separate from an employee’s other leave plans, such as
short-term disability and paid vacations, which might be
used by a new mother or father. Unpaid maternity and
paternity leave generally could be taken after regular paid
Jeave was used, and could continue for a fixed period of
time. Employees had a reasonable expectation of return-
ing to their own or a similar job following leave, although
this was not always specifically guaranteed.

For plans that provided a fixed number of days of un-
paid maternity or paternity leave, maximum maternity
benefits averaged just over 20 weeks and maximum pater-
nity benefits averaged just over 19 weeks in duration. As
shown below, the average weeks varied slightly by occupa-
tional group:

Unpaid Unpaid
maternity paternity
leave weeks leave weeks
All participants .. ceveees 204 19.3
Professional and administrative ... 22.0 20.9
Technical and clerical . 20.7 19.8
Production and service . 19.4 18.0

Individual plans differed considerably in the amount of
unpaid time allowed, ranging from under 6 weeks toa little
over 1 year. Nearly all plans with both maternity and pa-
ternity leave allowed the same length of time off for each
reason.’

7 For additional details on parental leave plans, see Joseph R.

Meisenheimer, “Employer Provisions for Parental Leave,” Monthly
Labor Review, October 1989, pp. 20-24.



Table 39. Medical care benefits: Percent of full-time participants in plans with overall limitations on benefits by amount of

deductible,’ medium and large firms, 1989

Professional and Technical and clerical | Production and service
All participants administrative participants participants Participants
Deductible Deductible Deductible Deductible
Type and amount of deductible®
Ex. Ex. Ex. Ex.
Total |Includes! ggg | Total |Includes) ago | Total |Inctudes| 5%, ) Total |inciudes)
hospital | ss pital hospital | ospital hospital | Septal hospital | oer
expense | expense EXPENSE | expense expense | expense SXPENSE | expense
Total ... 100 82 18 | 100 80 20 | 100 82 18 | 100 82 18
Deductible specified 95 82 14 95 80 15 96 e2 15 95 82 12
Deductible on an annual basis? . 95 82 14 95 80 18 96 81 18 95 82 12
Based on earnings’ ........... 2 2 iv) 3 3 (Vv) 3 2 iv) 2 2 iv)
Flat dollar amount . 93 79 13 92 7 15 94 79 15 93 8t 12
Less than $50 cnn ° iv) iv) iW) iy) is) 0 0) i) iW) VW) iv)
4 2 1 2 1 1 3 2 2 4 3 1
2 2] } 1 1 0) 1 0) 0) 3 3] 0
34 28 6 at 26 5 32 27 5 36 30 6
4 1 iv) 1 1 ) 1 1 iv) 1 1 iy)
$150 16 14 2 16 12 3 15 13 2 7 15 2
$151-$199 1 1 1 1 1 1 1 iy) iy) 1 1 1
- ai 19 2 22 19 3 21 19 2 20 18 2
1 v) Q 1 1 iV) 1 0) © 0) iy) i)
5 5 i) 6 6 i] 8 8 Vv) 4 i)
a) 0) - is) 0) - ° is) - is) i) -
3 2 1 3 3 5 3 1 21 6
6 5 ) 6 6 (v) 5 i.) 6 5 Oo
Deductible not on an annuat basis ....| () i) - io) () - ° 0) - i) co) -
No deductible .. 5 - 5 5 - 5 4 - 4 5 - 5

" The deductible is the amount of covered expenses that an individual
must pay before any charges are paid by the health care plan. Deduc-
tibles that apply separately to a specific category of expense, such as a
deductible for each hospital admission, were excluded from this tabulation.

® Amount of deductible described is for each insured person. However,
many plans contain a maximum family deductible. In some plans, the indi-
viduat and family deductibles are identical. if the deductible applied only
to dependents’ coverage, it was not tabulated.

* The basis of the deductible is the length of time within which a single

deductible requirement applies. Some plans require that expenses equal
to the deductible be inourred within a shorter period, such as 80 days.

* These plans have deductibles that vary by the amount of the parti
Pant’s earnings. A typical provision Is 1 percent of annual earnings with a
maximum deductible of $150.

* Less than 0.6 percent.

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

SI



Table 82. Defined benefit pension plans:' Percent of full-time participants in plans with dollar amount benefit formulas’ by
type and amount of formula, medium and large firms, 1989

Provision for maximum Provision for maximum
benefit! benefit!
‘Type and amount of formula® Total ‘Type and amount of formula? Total
‘Subject to | Not subject Subject to | Not subject
maximum |to maximury maximum |to maximum
All participants Production and service
Total 100 100 4100 Total 100 400 100
Flat monthly amount per year of [Flat monthly amount per year of
service .. 8 98 7 service 81 99 7
Less than $5. 2 - 2 Less than $5.00 . 2 - a
$5.00-$9.99 7 14 5 8 18 6
$10.00-$14.9: 12 7 10 13 18 12
$15.00-$19.9 18 34 13 16 24 14
$20.00-$24.9% 23 20 24 25 24 25
$25.00-§29.9: 16 5 19 13 5 16
$30.00 or greater 3 8 2 4 10 2
‘Amount per year of service varies |Amount per year of service varies
by service 2 - 3 by service . 2 - 2
‘Amount per year of service varies [Amount per year of service varies
by earnings .. 15 1 19 by earnings . 7 - at
Flat monthly benefit varies by
service 2 1 2 1 1 v)
* Excludes supplemental pension plans. * Less than 0.5 percent.
* Excludes plans with dollar amount formulas that serve as @ mini-
mum benefit alternative to a percent of earnings formula. NOTE: Data were insufficient to show professional-administrative and
* Ifa plan contained more than one dollar amount formula, a primary _technical-clerical workers separately. Because of rounding, sums of indi-
formula was selected and tabulated. vidual items may not equal totals. Where applicable, dash indicates no

* These maximum provisions are independent of Internal Revenue employees in this category.
Code ceilings on pensions payable from defined benefit plans,

93



Table 65. Dental care benefits: Percent of full-time
participants in plans with orthodontic benefits by lifetime
maximum amount of coverage, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
an par. | 2% | cal and | tion and
Dollar amount’ ticipants adminis-| clerical | service
trative | partici- | partici
partici | pants | pants
pants
Total .... 100 100 100 100
Lifetime maximum specified .. 85 87 86 84
Less than $500 1 0 i) 1
00 ? 6 7 8
$501-$749 7 4 4 10
$750 13 14 14 Ww
$751-$999 4 3 2 5
$1,000 36 42 39 32
$1,001-$1,499 .. 7 7 5 8
$1,500 8 8 8 7
Greater than $1,500 .. 3 2 7 2
No lifetime maximum 15 13 14 16

* Coverage for dental procedures may also be subject to scheduled al-
lowance, deductible, or coinsurance provisions in addition to maximum dol-

lar limitations.
® Less than 0.5 percent.

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

tals, Where applicable, dash indicates no employees in this category.

Table 66. Dental care benefits: Percent of full-time
Participants by provision for preauthorization of treatment,

medium and large firms, 1989

Profes-
sional | Techni- | Produc-
All par |_ 20d | cal and | tion and
Item ficipants| @dminis-| clerical | service
trative | partici | partici-
partic- | pants | pants
pants
Total 400 | 100 | 100 | 100
Preauthorization required 63 65 61 63
Minimum expense requiring
preauthorizatior
Less than $100 . i) - - 0
$100 14 14 14 14
$101 - $199 12 13 10 12
$200 16 7 17 15
Greater than $200 16 15 15 7
Dollar amount not determinable 5 7 6 4
Preauthorization not required 7 35 398 37

* Less than 0.5 percent.

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

tals. Where applicable, dash indicates no employees in this category.

72



Table 28. Sickness and accident insurance: Percent of

full-

participation,’ medium and large firms, 1989

ime participants by length-of-service requirements for

Profes-
sional | Techni- | Produc-
All par- | 80d | cal and |tion and
Length-ot-service requirement | igang, | adminis-| clerical | service
trative | partici- | partici-
partici- | pants | pants
pants
Total 100 | 100 | 100 | 100
With service requirement 78 68 72 7
1 month .. 23 31 27 19
2 months 12 5 7 18
3 months 23 18 19 26
4-5 months 8 6 8 8
6 months 5 4 7 5
7-11 months ... @) - el ie
1 year. 3 2 2 3
Over 1 year 1 2 a) ()
Without service requirement 24 30 27 2
Service requirement not
determinable ... 1 2 1 1

* Length of time employees must be on the job before they are cov-
ered by a plan that is at feast partially employer financed. There is fre-
quently an administrative time lag between completion of the requirement

If the lag was 1 month or more, it
was included in the service requirement. Minimum age requirements are

and the actual start of participation.

rare.
? Less than 0.5 percent.

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

33



Coverage for retired or laid-off workers

Although the Consolidated Omnibus Budget Reconcili-
ation Act of 1985 requires employers to continue health
care benefits for employees who are retired, laid off, or
otherwise separated from employment, workers may be
charged all of the premium costs. In addition, the continu-
ation period stipulated by the law is limited.?* The survey
focused on coverage for retired and laid off employees that
was financed wholly or partly by the employer (tables 59 to
61).

Of the medical care participants in the survey, 42 per-
cent worked for employers who financed, at least in part,
medical care protection after retirement. The majority of
workers received post retirement coverage regardless of
their age. However, a small number of workers received
post retirement coverage only until age 65, when Medicare
coverage becomes available. Two-fifths of the workers
with employer-financed post retirement medical cover-
age did not have to meet eligibility requirements. Of those
workers who did have an eligibility requirement imposed,
the requirement was most commonly a stated length of
service or qualification for the company pension plan.

The level of medical care coverage for retirees under age
65 was generally the same as for active workers. Although
benefit provisions were reduced for some retirees upon
reaching age 65, more commonly there was no change in
benefit levels apart from coordination with Medicare.

Employer-financed medical care coverage for laid-off
employees was less common: only 22 percent of the partic-
ipants had such protection. The maximum period of em-
ployer-financed protection was often 3 months or less, af-
ter which laid-off employees were required to pay the
entire cost of continued coverage.

Dental Care

Dental care benefits were available to 66 percent of em-
ployees covered by the survey (tables 62 to 67). The inci-
dence of dental care has grown significantly since the sur-
vey began in 1979. In that year, 49 percent of workers had
dental coverage. Dental care may be offered as part of a
comprehensive medical and dental plan, or as a separate
plan in addition to medical coverage. Often, employers of-
fer a series of medical plans from which employees may
choose, as well as a separate dental plan that can accompa-
ny any medical plan. About half of all dental care partici-
pants were required to contribute toward the cost of their
individual dental coverage, and about two-thirds were re-
quired to contribute for family coverage.

Dental plans typically cover preventive and restorative

22 The act requires employers who maintain health insurance plans
to continue coverage to terminated workers for up to 18 months. Work-
ers may be charged up to 102 percent of the premium cost. Based on
a 1989 change to this law, employees disabled at the time of termination
can have benefits continued for up to 29 months, and can be charged
up to 150 percent of the premium cost after 18 months.

45

services, and two-thirds of participants were in plans that
also covered orthodontic expenses, at least for children.
Preventive care typically includes dental examinations,
prophylaxis (cleaning), and X-rays. Restorative proce-
dures include fillings, periodontal care, endodontic care,
prosthetics, and crowns.”?

Dental payments were most commonly based on a per-
centage of the usual, customary, and reasonable charge for
a procedure. The percentage covered by a plan generally
depended on the type of procedure performed. Less costly
procedures such as examinations and X-rays were usually
covered at 80 or 100 percent. Fillings, surgery, endodon-
tics, and periodontics were more likely to be covered at 80
percent. The most expensive procedures—inlays, crowns,
prosthetics, and orthodontia—were often covered at 50
percent of the usual, customary, and reasonable charge.

About 15 percent of dental plan participants were of-
fered reimbursement based on a schedule of cash allow-
ances for restorative services, such as fillings, crowns, and
endodontics. In this type of arrangement, each procedure
is subject to a specified maximum dollar amount that can
be paid to the participant or dentist. Preventive proce-
dures were less likely to be subject to this type of schedule,
and orthodontia was rarely covered in this way.

About 1 percent of dental plan participants had services
covered by an incentive schedule. (Orthodontia was never
covered in this way.) Under this arrangement, the per-
centage of dental expenses paid by the plan increases each
year if the participant is examined regularly by a dentist.

Finally, a small number of participants were in plans re-
quiring a copayment, after which benefits were paid in full.
Copayments were commonly $5 or $10 per procedure for
preventive care, while higher copayments often applied to
major dental services.

Two-thirds of dental participants were in plans that
specified a deductible amount before any benefits were
paid by the plan. The most frequently observed deductible
was $25 or $50 deductible each year. However, some plans
required the participant to pay a deductible (usually $50)
only once while a member of the plan rather than every
year. White-collar workers were more likely than blue-
collar workers to have plans with deductible requirements.

Plans that limited the amount of payment each year by
specifying an annual maximum benefit enrolled 82 percent
of dental plan participants. The most common limit was
$1,000 per year. Orthodontic services were almost always
subject to separate lifetime maximums, commonly $750 or
$1,000. In 1989, the average lifetime orthodontia maxi-
mum was $1,009.24

23 Peridontal care is the treatment of tissues and bones supporting the
teeth. Endodontics involves the treatment of the tooth pulp, such as
root canal work. Prosthetics deals with the construction and fitting of
bridges and dentures.

4 For more details on dental care benefits, see Rita S. Jain, “Em-

ployer-Sponsored Dental Insurance Eases the Pain,” Monthly Labor
Review, October 1988, pp. 18-23.



Table 104. Savings and thrift plans: Percent of full-time participants in plans that allow pretax employee contributions by
method of determining contribution, medium and large firms, 1989

initial contributions

Initial contibutions | must be pretax; | Initial contributions
i must be pretax; additional may be either pretax
Item’ Total all ote preter must additional contributions may be ‘or posttax
contributions must be | either pretax or at the employee's
posttax posttax, at the option
‘employee's option
All participants
Total .. 100 96 7 4 53

Maximum contributions allowed:
Less than 5 percent 3 1 i) - 1
5 percent 1 1 0) - 1
6 percent 8 3 2 - 2
7 percent te) - te) - -
8 percent 5 3 a) - 2
9 percent 1 1 - - -
10 percent .. 7 7 2 1 6
11 percent .. 1 ® - - 1
11.01-11.99 precent i) i) - - -
12 percent .. 14 6 1 1 7
12.01-12.99 percent 1 ro) - - is)
13 percent .. 2 1 - 1 1
14 percent . 2 1 = - 1
15 percent .. 16 5 io) ro) "
16 percent . 7 4 - 1 12
Greater than 16 percent 10 2 1 7
Specified dollar amount 1 1 - 4
Internal Revenue Code limit . 1 1 - - -

Professional and administrative
Total .. 100 35 6 4 55

Maximum contributions allowed:
Less than 5 percent 3 2 @ - 1
5 percent 1 0 is) - 1
6 percent 8 3 2 - 3
7 percent (o) - is) - -
8 percent 7 4 1 2
9 percent 1 1 - - -
10 percent .. 13 6 1 Oy 6
11 percent .. 2 r 0) - - 1
11.01-11.99 precent ® ie) - - -
12 percent .. 14 6 1 1 7
42.01-12.99 percent to) ) - - a
13 percent .. 3 4 1 roy
14 percent .. 2 1 - - 1
15 percent 19 5 ) 0) 14
16 percent . 13 2 - ro) 10
Greater than 16 percent 13 1 2 9
Specified dollar amount is) r¢) - - -
Internal Revenue Code limit . 1 1 - - a

See footnotes at end of table.

114



Table 38. Health care benefits: Percent of full-time participants by arrangement for payment to providers and type of

financial intermediary, medium and large firms, 1989

All participants Professional and adminis- | Technical and clerical} Production and service
Fee arrangement and financial trative participants participants participants.
intermediary Medical | Dental | Vision | Medical | Dental | Vision | Medical | Dental | Vision | Medical | Dental | Vision
care’ care care care’ care care care’ care care care’ care care
Total 300 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100
Traditional fee tor service ... 4 1 58 68 92 st 67 89 53 80 92 64
No intermediary--selt
insured” 32 44 a7 31 42 26 30 41 23 35 46 30
‘Commercial insurance company| 25 38 7 24 38 12 24 36 18 27 35 19
Blue Cross-Blue Shield 14 5 4 12 5 3 11 6 2 7 5
Independent organization .. 0) ) 0) a) 0) 9) iy) iy) e) iv) io)
Medical or dental society - 5 10 - 40 - 5 10 9
Other .. . - Q 0) - Q - - Q 2) - 1
Combined 2 ® - 1 9) - 1 3) - 2 -
Preferred provider organization* 10 4 9 10 2 7 13 6 8 8 4 10
No intermediary--self
insured . . 4 1 3 4 1 2 7 1 2 3 2 4
Commercial insurance company| 3 1 1 3 1 1 3 1 1 2 2 1
Blue Cross-Blue Shield .. 3 | @ 3 2| @ 2 3 1 3 2] 6 3
Independent organization i) iy) i) iv) iy) iy) Vv) iv) iv) iv) @ iv)
Medical or dental society ~ 2 ~ 1 2 ~ 3 2 - 0) 2
Combined re) - - iv) - - iy) - - ¢ - -
Prepaid health maintenance
organization* 7 5 33 24 6 at 20 5 99 12 4 25
No intermediary--self
insured* ie) W) 0 a) iv) 9) 0) 0) i) Q iv)
Commercial insurance company| 2 1 3 2 4 2 2 3 1 ra) 2
Blue Cross-Blue Shield . 1 (a) 2 1 2 1 e 2 1 e) 1
Independent organization 14 3 28 7 4 34 16 3 33 10 2 21
Medical or dental society - 1 a) - ) ra) - i) ro) - 1 a)
Combined @) : @) 0) ~ 0 Q - @) Q - i)
Other... e) ) i) 0 ) i) iv) iv) i] a) Vv) 0

* Plans providing services or payments for services rendered in the
hospital or by a physician. Excludes plans that provided only dental, vi-
sion, or prescription drug coverage.

® ‘Includes plans that are financed on a pay-as-you-go basis, plans fi
nanced through contributions to a trust fund established to pay benefits,
and plans operating their own facilities if at least partially financed by
‘employer contributions. Includes plans that are administered by a com-
mercial carrier through Administrative Services Only-Minimum Premium
Plan (ASO-MPP) contracts and plans in which a commercial carrier pro-
vides protection only against extraordinary claims.

® Less than 0.5 percent.

* A preferred provider organization (PPO) is a group of hospitals and
physicians that contracts to provide comprehensive medical services.

To encourage use of organization members, the health care plan limits
reimbursement rates when participants use nonmember services.

5 Includes federally qualified (those meeting standards of the Health
Maintenance Organization Act of 1973, as amended) and other HMO's
delivering comprehensive health care on a prepayment rather than fee-
for-service basis.

© Includes exclusive provider organizations, which are groups of hos-
pitats and physicians that contract to provide comprehensive medical
services, Participants are required to obtain services from members of
the organization in order to receive plan benefits.

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



Appendix B: Availability of the

Survey’s Data Base

The tables published in this bulletin present the major
findings of the employee benefits survey in medium and
large private firms; results of additional research appear as
occasional articles in the Monthly Labor Review. Howev-
er, the statistical tables in these publications cover only a
portion of the employee benefits information collected.
Persons interested in all provisions of a particular benefit
studied during the annual survey can purchase a set of
magnetic tapes containing the survey's data base through
the Office of Compensation and Working Conditions,
Bureau of Labor Statistics, Washington, D.C. 20212. Be-
cause of the Bureau’s pledge of confidentiality to:survey
respondents, the tapes have been carefully screened to re-
move or alter any data that would reveal the identity of in-
dividual establishments. The charge for furnishing the
data is limited to the cost of producing the tapes and pre-
paring supporting documentation.

For major benefit items, the BLSsurvey obtained plan pro-
visions and employee participation data for each of three
employee groups (professional and administrative, techni-
cal and clerical, and production and service). Information
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, simi-
lar to those published in this bulletin, for other items in the
data base. For some data items not presented in this bulle-
tin, however, the data file is insufficient to produce reliable
national estimates, because either information on the provi-
sions frequently was not available or the number of em-
ployees with the provision was very small. Moreover, the
tapes may not yield reliable estimates for individual
industries, geographic regions, or establishment size
classes. Full documentation accompanies the tapes, in-
cluding examples of estimating formulas. Although Bureau
staff will respond to questions concerning the content of the
tapes, technical assistance in developing estimates is limit-
ed due to the heavy workload associated with the survey
program.

Data users can purchase individual tapes with details of
plans for each of the following benefits or groups of bene-
fits: Medical and dental care; life insurance; sickness and
accident insurance; long-term disability insurance; retire-
ment and capital accumulation plans; and time off, flexible

135

benefits, and reimbursement accounts. (This last tape con-
tains data on lunch time, rest periods, holidays, personal

leave, vacations, funeral leave, jury —duty leave, military
leave, parental leave, sick leave, flexible benefits plans, and
reimbursement accounts.) Combined tapes are also avail-
able that contain data for all benefits surveyed. (Table 2
presents all of the information collected on the other sur-
veyed benefits.) The plan data file contains provisions for
each plan that was reported and for which usable informa-
tion was available. However, plan identification numbers
on the tape are scrambled (and other identifying informa-
tion is removed) to protect the confidentiality of respond-
ing establishments.

Purchasers also receive the control file, which contains
establishment information required to produce estimates
from the plan data. Control file records include establish-
ment size codes; geographic, industrial, and employee
group classification codes; and the weighted number of
workers in each employee group. The control file also lists
all benefit plans offered in an establishment, with the
weighted number of plan participants in each employee
group. A planis listed on more than one control file record
if it covers employees in more than one establishment. Al-
though plan identification numbers on the control file are
scrambled, the same scrambled numbers appear on the
data file so they can be matched to make estimates. Be-
cause establishment schedule numbers on the control file
are scrambled differently for each employee group, it will
not be possible to link together plans offered to different
employee groups within an establishment.

Benefit provisions obtained from plan documents are
recorded in coding manuals for medical and dental care,
insurance, retirement, and capital accumulation plans,
and are 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. Time off, flexible benefits, and reimbursement ac-
count provisions are reported directly on collection forms,
copies of which are also provided to tape purchasers.

The analysis of medical and dental care, insurance, re-
tirement, and capital accumulation plans is extremely de-
tailed. The following list of medical and dental care plan
provisions included in the data base gives an indication of



Preauthorization clauses require participants to obtain
authorization from the plan before undergoing expensive
treatment. Two-thirds of the dental participants were in
plans with this cost containment technique. Commonly,
procedures costing more than $100 or $200 were subject to
advance authorization.

Dental plans included in the survey were almost entirely
fee-for-service plans, which reimburse patients or provid-
ers only after services are received. Such plans were most
commonly self-insured or obtained through a commercial
insurer. Five percent of participants received benefits
through a dental HMO and 4 percent received benefits
through a dental preferred provider organization.

Where dental benefits are included in a single plan with
medical care benefits, it was not possible to distinguish
which portion of the employee’s contribution, if applica-
ble, went toward dental coverage. Employee contribution
data were examined in stand-alone dental plans, that is,
those offered separately from medical plans. When such
plans required an employee contribution, that contribu-
tion was typically under $5 per month for individual cov-
erage and under $15 per month for family coverage.

Life Insurance

Life insurance plans covered 94 percent of full-time em-
ployees in 1989; nearly all participants had the cost of a
basic plan paid entirely by the employer (tables 68 to 76).
Where an employee contribution was required, it was most
commonly stated as a flat amount per $1,000 of coverage,
such as 25 cents per $1,000 of coverage per month.
Amounts of life insurance coverage have grown steadily
since this survey series began in 1979, either through an
increase in specified dollar amounts of insurance or
through increased maximums in formulas linked to earn-
ings.

Basic coverage for two-thirds of all life insurance par-
ticipants was linked to their earnings, enabling the level of
protection to increase automatically with a rise in pay.
Earnings~based formulas were much more prevalent
among white-collar workers (77 percent) than among
blue-collar workers (57 percent). The most common
method of tying life insurance protection to earnings was
to multiply the employee’s annual earnings by a factor of 1
or 2 and round the product to the next $1,000. For exam-
ple, an employee earning $22,700 would receive $46,000 of
coverage under a plan providing 2 times earnings ($22,700
times 2 equals $45,400, which is rounded up to $46,000).

The average multiple—of-earnings benefit formula was
1.5 times earnings in 1989, the same as in 1988. Just under
half of all participants in these plans had insurance equal
to their annual earnings. Two in five had coverage equal to
twice annual earnings or more.

46

Limits on the amount of life insurance coverage avail-
able to participants in 1989 were placed on 60 percent of
all workers covered by multiple-of—earnings plans. These
maximum amounts have increased significantly since first
surveyed in 1979. In that year, 6 percent of participants in
multiple-of—earnings plans were subject to a limitation on
benefits of $250,000 or more. That number increased to 30
percent in 1989. In fact, 8 percent of participants in these
plans had maximum limitations of $1,000,000 or more in
1989,

A flat dollar amount of insurance, regardless of earnings,
affected 29 percent of life insurance plan participants. Such
benefits were most common among production and service
participants. The average flat—dollar amount of life insur-
ance coverage was highest for professional and administra-
tive participants (nearly $14,000), while technical and cler-
ical participants averaged almost $13,000 and production
and service participants averaged about $11,500. While
usually providing smaller amounts of insurance than ear-
nings—based formulas, flat amount coverage has improved
over the years. For example, participants in plans providing
life insurance of $20,000 or more increased from 2 percent
of all flat-dollar plan participants in 1979 to 11 percent in
1984 and 18 percent in 1989.

To provide an indication of the average life insurance
benefit available to all workers, calculations were made
based on assumed annual earnings and years of service.
For the participants in each life insurance plan, a dollar
amount of benefit was computed, These benefits were then
averaged and weighted by current participation. For par-
ticipants with assumed annual earnings of $25,000 at 10
years of service,the average benefit was nearly $32,000;
for $45,000 at 10 years of service, the average was just
over $50,000.25

More than half of life insurance participants faced re-
duced coverage as older active workers. Coverage is re-
duced to account for the increased cost of insuring older
workers,”° Of the participants whose plans reduced cover-
age, just over one-half have their first reduction at age 65.
Most of the remaining workers experience this at age 70. It
was uncommon for reductions to occur before age 65.

Many plans reduced coverage for older workers only
once, typically to 50 percent of the original life insurance
amount. Other plans reduced coverage in several stages.
One common provision was to reduce coverage to 65 per-
cent at age 65, then to 50 percent at age 70.

25 For further details on these life insurance calculations, see Adam
Z. Bellet, “Employer-sponsored Life Insurance: A New Look,” Month-
ly Labor Review, October 1989, pp. 25-28.

2% Details on life insurance benefits for older workers, are discussed
by Michael A. Miller, “Age-related Reductions In Workers’ Life Insur-
ance,” Monthly Labor Review, September 1985, pp. 29-34



Table 69. Life insurance: Percent of full-time participants in plans with multiple-of-earnings formulas’ by amount of basic
insurance and maximum coverage provisions, medium and large firms, 1989

In plans In plans with maximum coverage
without
Formula Total | maximum | gy | Less than | $50,000- | $100,000- | $250,000- | $600,000- | $1,000,000
coverage $60,000 | $99,999 | $249,999 | $499,999 | $999,999 | or more
All participants
Total ... 100 40 60 4 13 13 12 10 8
Life insurance is equat to annual
earnings time:
3 2 2 i) 0] 1 iv) is) 1)
a7 18 29 2 9 G 2 4 6
1 is) 1 > - 0 ° - i)
9 2 7 o) 2 1 2 1 3)
1 - 1 ~ © 0 - - -
29 15 14 7) 1 4 4 3 1
1 i) 1 - - > () i) -
a 1 3 1 Q ie) 1 0 °
0) = 0 - @ - - ~ -
2 ¢ 2 - i) Q 1 1 9)
1 (9) 1 - - (] 1 ) Vv)
Multiple varying with earnings .. 1 o) 1 - - 0 1 - -
Professional and administrative
Total 100 38 62 1 14 16 14 10 8
3 1 2 is) 1 ) 0) ) o)
45 7 28 1 9 7 2 4 5
1 - 1 < - iv) 0) - @
40 3 7 °% 2 2 1 1 to)
e - 9) ~ io) ° - - -
29 13 16 ) 2 5 5 3 1
1 i) 1 - - : 1 1 -
3 1 1 - iv) i) (a) 7) is)
) - 0) - © - ~ - -
3 1 3 - is) Q 1 1 9)
2 1 1 - - ©) 1 v) Vv)
Multiple varying with earning 2 ° 2 - Q 1 - -
Technical and clerical
Total 100 36 64 2 18 15 "1 8 10
Life insurance is equal to annual .
. earnings times:?
Less than 1.0 4 1 3 - i) 1 i) i) 0,
51 16 35 2 14 7 2 4 7
is) ie) ) - - i) 0) - Q
8 2 6 °) 2 2 1 1 iv)
iv) - iv) - 0) iv) - - -
28 15 13 ) 1 4 4 3 1
1 0 1 - - - 1 rv) -
2 1 1 - 9] iv) “ iV) iv)
iy) = i) - 9) = - - -
3. 2 2) 2 - 0 Q 1 1 ()
More than 3.0 2 1 1 - - i) 1 () is)
Multiple varying with earnings 2 1 - - 1 0 - -

See footnotes at end of table.

75


putation of pension benefits. (See chapter 4 for details of
LTD benefit plans.)

Eligibility for disability retirement benefits usually de-
pended on length of service; generally 10 years or more
were required. Twelve percent of the participants, howev-
er, had no age or service requirement, and 31 percent had
to meet the qualifications of their LTD plans, which usually
imposed service requirements of 3 months or less.

Postponed retirement

Although all employees may continue to work after nor-
mal retirement age and accrue regular pension benefits, in
1989 only 9 percent of the pension plan participants could
receive benefit increases that reflected specific adjust-
ments for service beyond age 65 (table 90).3+ Most of these
increases were determined actuarially to reflect the older
Tetiree’s receipt of his or her pension over a shorter retire-
ment period.

Postretirement pension increases

Inflation can severely erode the purchasing power of a
fixed pension throughout a worker’s retirement years. To
guard against this, some pensions are adjusted on a discre-
tionary basis while others are subject to automatic in-
creases specified in the pension plans. Plans that increased
pensions for current retirees at least once during the
1984-88 period covered 28 percent of pension plan partici-
pants. Most of these increases were discretionary, or ad
hoc, rather than automatic. Ad hoc increases were made
to beneficiaries under plans covering 22 percent of partici-
pants (table 91 to 92).

The amounts of ad hoc increases were not directly
linked to a cost-of-living index. Instead, retirees’ current
pensions were usually increased by a percent of the present
benefit, either a uniform amount or varying by the length
of retirement.

Since the survey provides only the number of current
employees covered by defined benefit pension plans and
not the number of retirees, it cannot specify the proportion
of annuitants actually receiving postretirement pension in-
creases. Thus, the measures discussed in this section de-
scribe the incidence of postretirement increases among ac-
tive plan participants.

The size of ad hoc pension increases during 1984-88
was computed for each plan granting such an increase, us-
ing three retirement lengths (5, 10, and 15 years) and two
monthly pension amounts ($250 and $750) in effect on
December 31, 1983. Where increases varied by a retiree’s

33 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.

4 Recently enacted changes in the age Discrimination in Employment
Act require employers to credit all service after normal retirement age,
subject to any maximum credited service provision of the plan.

85

length of service, 25 years of service was assumed. These
increases were then averaged, by multiplying them by the
proportion of active workers participating, to provide sur-
veywide estimates for each example. As shown in the tab-
ulations below, the length of retirement was a significant
factor in determining the size of pension adjustments, with
larger increases paid to persons retired longest.

Monthly pension on Years of retirement

December 31, 1983 $10 15

$250:
Average pension on December 31, 1988 .
Percent change, December 31, 1983-88 . .

$750:
Average pension on December 31, 1988 . . $786 $813 $839
Percent change, December 31, 1983-88 . . 5 8 1

The BLs Consumer Price Index for All Urban Consum-
ers (CPI-U) rose 19 percent over the 5-year period stud-
ied.>> For retirees in plans with ad hoc adjustments, and
with monthly pensions and years of retirement shown
above, average adjustments ranged from 5 to 14 percent
over the same 5-year period.

Plans that provided for automatic increases in pension
benefits. to compensate for increases in the cost of living
covered 7 percent of all participants. In most instances,
these cost-of-living—adjustment formulas were based on
changes in the BLS Consumer Price Index. Adjustments
were often restricted, however, by provisions that limited
the benefit change to a portion of the CPI change, by ceil-
ings (generally 3 percent or less) on the periodic increase
that could be applied, and, infrequently, by maximum life-
time increases.’ Plans providing cost-of-living increases
most often called for annual adjustments.

The survey also provided information on the incidence
of lump-sum payments made to current retirees to com-
pensate for inflation. In 1989, 6 percent of participants
were in plans that gave retirees at least one lump-sum pay-
ment during the 1984-88 period, typically $200. Most
plans providing these lump sums also provided, during the
same period, permanent increases in regular monthly an-
nuities.

$266 $276 $284
6 10 14

Vesting

Even when an employee leaves an employer before-be-
coming eligible for either a normal, early, or disability re-
tirement benefit, a pension may ultimately be paid (tables
93 to 94). If certain conditions are satisfied at the time of
separation, workers have a vested interest in all or a por-
tion of their accrued pension benefits and may begin re-
ceiving benefits years later.

Although all pension participants are entitled to vested
benefits under the Employee Retirement Income Security

35-The rate of increase was determined by comparing the annual aver-
age CPI-U for 1988 to the annual average CPI-U for 1983. For adiscus-
sion of postretirement increases, see Donald G. Schmitt, “Postretire-
ment Increases under Private Pension Plans,” Monthly Labor Review,
September 1984, pp. 3-8.



Chart 2. Medica! care benefits: Percent of full-time particlpants by type
of fee arrangement, medium and large firms, 1986 and 1989

1986 1989

O Fee for service

@ Preferred provider
organization

Health maintenance
organization

Chart 3. Medical care benefits: Percent of full-time participants In plans
with deductibles by selected amounts, medium and large firms, 1980-89

Percent
60

50
40
30

20

$50 or less

10 $150 or more

1980 1983 1986 1989

40



Appendix A: Technical Note

Scope of survey

This survey of the incidence and characteristics of em-
ployee benefit plans covers private sector establishments!
in the United States, excluding Alaska and Hawaii, em-
ploying at least 100 workers. Industrial coverage includes:
Mining; construction; manufacturing; transportation,
communications, electric, gas, and sanitary services;
wholesale trade; retail trade; finance, insurance, and real
estate; and services.

Establishments meeting the minimum size criterion as
of the reference date of the sampling frame are included in
the survey, even if they employed fewer workers at the
time of data collection. Establishments found to be out-
side the industrial scope of the survey at the time of data
collection are excluded.

The industrial coverage and minimum establishment
size for this survey are the same as for the 1988 survey but
differ from the private sector surveys conducted annually
from 1979 to 1986. The previous surveys excluded most of
the service industries and included establishments which
employed at least 50, 100, or 250 workers, depending on
the industry.

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 re-
quire a foundation of knowledge in the theories, concepts,
principles, and practices of a broad field of science, learn-
ing, administration, or management acquired through a
college-level education or the equivalent in progressively
responsible experience. Above entry levels, the exercise of
a high degree of creativity, originality, analytical ability,
and independent judgment to solve varied and complex
problems in the field of work is characteristic.

Technical-clerical. Includes office and sales clerical, tech-
nical support, protective services, and other such occupa-

‘For this survey, a plan had to allow choices among two types of bene-
fits or more to be classified as a flexible benefits plan. Thus, plans that
permitted a selection in only one benefit (for example, a choice among
several health care options or plans) were not classified as flexible bene-
fits plans.

126

tions that do not require full knowledge of a professional
or administrative field of work or the application of a high
level of creativity, originality, analytical ability, or inde-
pendent judgment. Job performance skills are typically
acquired through on-the-job experience and/or specific
training which is less than that usually represented by a
baccalaureate degree. These skills include the application
of a practical knowledge of established procedures, prac-
tices, precedents, and guidelines.

Production-service. Includes skilled, semiskilled, and un-
skilled trades; craft and production occupations; manual
labor occupations; custodial occupations; and operatives.

Excluded from the survey are executive employees (de-
fined as those whose decisions have direct and substantial
effects on an organization’s policymaking); part-time,
temporary, and seasonal employees; and operating em-
ployees in constant travel status, 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 fol-
lowing benefit areas: Paid lunch periods, paid rest periods,
paid holidays, paid vacations, paid personal leave, paid fu-
neral leave, paid military leave, paid jury—duty leave, paid
and unpaid parental leave, paid sick leave, sickness and ac-
cident insurance, long-term disability insurance, health
care, life insurance, retirement and capital accumulation
plans, flexible benefits plans, and reimbursement ac-
counts.

Data were also collected on the incidence of the follow-
ing other benefits: Severance pay, supplemental unem-
ployment benefits, parking, subsidized commuting, travel
accident insurance, nonproduction cash bonuses, finan-
cial counseling, prepaid legal services, gifts, child care,
adoption assistance, eldercare, in-house infirmaries,
long-term care insurance, wellness programs, recreation
facilities, subsidized meals, employee discounts, reloca-
tion allowances, educational assistance, and employee as-
sistance programs.

Sampling frame

The list of establishments from which the sample was

selected (called the sampling frame) was developed by re-

fining data from the most recently available State unem-
ployment insurance (UI) reports for the 48 States covered


rate or U.S. Treasury bill rate), were at the discretion of the
plan sponsor (employer, employer association, or union),
or varied by the reason for the loan. In the latter case, loans
for the purchase of a home are often available at lower
rates than other loans. The following table shows the per-
cent of participants in savings and thrift plans with loan
provisions by the method of determining the interest rate:

Method of determining Percent of
interest on loan participants
Fixed rate ........ 6
Based on given econo! 39

At discretion of plan ..
Varies by reason for loa
Not determinable

Distribution (table 108). At retirement, savings and thrift
plans virtually always allowed for payout in the form of a
lump sum. Many participants were given a choice from
among a lump sum and other options, such as a lifetime
annuity or installments over a specified period.

Profit-sharing plans

Profit-sharing plans were available to 16 percent of all
employees in 1989 (table 99), There are three types of
profit-sharing plans—cash plans (covering | percent of
the workers), deferred plans (14 percent), and plans that
offer a combination of cash and deferred benefits (2 per-
cent). In a cash plan, benefits are paid directly to the par-
ticipants in cash, usually at the end of the year, while a de-
ferred plan holds money in employee accounts until
retirement or another condition stipulated by the plan (for
example, disability or death). In a combined plan, thé em-
ployee may automatically receive a portion of the profits in
cash, with the remainder placed in a deferred account, or
the employee may be given a choice of cash or deferred
benefits.

Three-fifths of the participants in deferred profit-shar-
ing plans had employer contributions determined by a spe-
cified formula, such as 4 percent of profits if annual sales
were $2 million to $5 million, 8 percent if sales exceeded $5
million. The remaining participants were in plans where
the employer contribution was determined at the discre-
tion of the employer (table 109).

Once the employer contribution is determined, it may
be allocated to individual participants in a number of
ways. The most common method of allocation was as a
proportion of salary (64 percent of plan participants).
Other allocation methods included formulas based on
earnings and service, participants’ contributions as a per-
centage of total contributions, and equal allocations to all
participants. Another plan feature, loans from employee
accounts, was available to one-fifth of the participants in
deferred profit-sharing plans.

Participation and vesting

Minimum age and/or service participation require-
ments are more common in defined contribution plans

than in defined benefit plans (table 110). To begin accu-
mulating benefits, 85 percent of savings and thrift plan
participants and 94 percent of deferred profit-sharing
plan participants had to meet such requirements. In con-
trast, only 65 percent of defined benefit plan participants
faced such provisions.

Of the defined contribution plans with participation re-
quirements, most required a minimum amount of service,
commonly 1 year, but did not require an employee to be a
designated minimum age. Conversely, defined benefit
pension plans that included participation requirements
most often specified a minimum age and a minimum
amount of service.

Defined contribution plans are subject to ERISA vesting
rules in the same manner as defined benefit pension plans
(table 111). Vesting schedules vary significantly, however,
between defined benefit and defined contribution plans,
and variations are also common between individual types of
defined contribution plans. All vesting schedules apply to
employer contributions; employee contributions (includ-
ing pretax contributions) are always 100-percent vested.

As with defined benefit plans, many sponsors of defined
contribution plans adopted shorter vesting schedules in
1989. Participation in plans with immediate full vesting or
full vesting schedules of 7 years or less increased signifi-
cantly.42

Immediate full vesting, a feature growing among de-
fined contribution plans but rarely found in defined bene-
fit plans, was available to 30 percent of savings and thrift
plan participants and 37 percent of deferred profit-shar-
ing plan participants. Graduated vesting, where an em-
ployee’s nonforfeitable percentage increases over time and
reaches 100 percent, usually after 5 or 7 years, was most
common in deferred profit-sharing plans, with half of the
participants covered by such a provision. One-third of
savings and thrift plans participants had graduated vest-
ing, and only 11 percent of defined benefit plan partici-
pants had such vesting.

“Cliff” vesting, where no vesting occurs until an em-
ployee satisfies the service requirements for 100—percent
vesting, is found in a large majority of defined benefit
plans, but was required of only 25 percent of savings and
thrift plan participants and 12 percent of deferred profit-
sharing plan participants. Most of these participants were
fully vested after reaching 5 years of service.

Finally, class-year vesting, where employer contribu-
tions for a particular year (class) become nonforfeitable af-
ter a specific period of time, was available to only 13 per-
cent of savings and thrift plan participants. Such vesting
provisions were uncommon in profit-sharing plans.

42 Multiemployer plans may continue to use 10-year vesting schedules
pursuant to a collectively bargained agreement. Single-employer plans,
in accordance with the Tax Reform Act of 1986, were required to insti-
tute new vesting standards by the beginning of the plan year that started
on or after January 1, 1989.

110



Table 110. Savings and thrift and deferred profit sharing plans: Percent of full-time participants by age and length-of-serv-
ice requirements for participation, medium and large firms, 1989

, Professional and administra} Technical and clerical Production and service
age and son ‘i All participants tive participants participants participants
Je and service requiremer
provision’ Savings and | Deferred | savings and | Defered | savings and | Deferred | savings ang |_ Deferred
profit sharing profit sharing | $2! profit sharing | Saving profit sharing
thei plans eens | thrift plans [Peng | thrift plans | Prot are thrift plans plans
Total .. 100 100 100 400 100 100 100 100
With minimum age and/or service
requirement + 85 94 85 93 89 93 83 94
Service requirement only 62 65 63 67 61 65 60 64
3 months or less 4 1 4 2 4 2 4 1
4-5 months e - i) - io) - 1) -
7 3 9 3 6 3 6 4
ra 54 6 54 45 50 44 56
¢ - r - a) - - -
4 1 3 1 4 6 6 )
1 5 7 2 5 () 4
Age 20 or less .. 5 4 5 4 5 a 4 4
No service requirement i) 1 io) 1 a) 1 1 1
4-11 months 3 2 3 2 3 1 2 3
1 year 2 1 2 2 2 1 1 )
Age 21 19 25 16 22 23 24 19 27
No service requirement 1 ® 1 1 1 1 2 ®
4-6 months 1 2 1 1 1 1 1 2
7-11 months @ - (a) - ia) - @ -
4 year 15 23 13 21 19 22 15 24
Over 1 year .. 1 - 1 - 1 - a -
Age 22 or older ie) - ia) e - - -
1 year @ - @ - iv - - -
Over 1 year .. to) - ro) - - - - -
Without minimum age and/or
service requirement .. 15 6 15 7 4 7 7 6
‘Age and service requirement not
determinable ... , 6 - i) - - - - -

" Ifa plan had alternate participation requirements, one of which was
service only, the service only requirement was tabulated.

? Less than 0.5 percent.

119

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

|
|
i
i



Table 113. Plan financing: Percent of full-time participants in selected employee benefit programs by source of financing,

medium and large firms, 1989

Sickness and | Long-term Defined
° angie" | Medical care | Medical care | Dental care | Dental care i i‘
accident disabllty ere | Life insurance | benefit
een | insurances | foremployee | for family | for employee | for family pension
Ail participants

Total .. 100 100 100 100 100 100 100 100
Wholly employer financed .. 83 79 53 34 52 37 87 96
Partly employer financed 7 at 47 66 48 63 13 4

Professional and

administrative

Total ... 100 400 100 100 100 100 100 100
Wholly employer financed . 75 7 49 30 46 33 86 95
Partly employer financed 25 23 51 70 84 67 14 5

Technical and clerical .

Total .. 100 100 100 100 100 100 100 100
Wholly employer financed . 76 7 45 27 46 31 86 97
Partly employer financed 24 25 55 73 4 68 14 3

Production and service

Total .. 100 100 100 100 100 100 100 100
‘Wholly employer financed 87 87 58 4a 59 43 88 95
Partly employer financed 13 13 42 59 A 37 12 5

’

NOTE: Because of rounding, sums of individual items may not equal total. Where applicable, dash indicates no employees in this category.

124



Contents

Chapter 1. Incidence of benefits .......... 2... cece eee e cece eee e eee eeeeees
Time off and disability benefits ......--...--- esse eee cence eet ee ence eee
Medical care, dental care, life insurance, retirement, and capital accumulation plans .
Flexible benefits plans and reimbursement accounts ..............ceceeececeeueeues
Other benefits ..

Chapter 2. Highlights of plan provisions
Paid time off ................0.06
Paid and unpaid parental leave ..
Disability benefits ..
Medical care, dental care, and life insurance
Defined benefit pension plans
Defined contribution plans .
Flexible benefits plans and reimbursement accounts . .

Chapter 3. Work schedules, paid time off, and parental leave ...
Work schedules
Paid lunch and rest periods
Paid holidays .
Paid vacations .
Paid personal leave ............ ccc cece cece cece eee
Paid funeral leave, jury—duty leave, and military leave
Parental leave

Chapter 4. Disability benefits .
Overview ...
Paid sick leave
Sickness and accident insurance .
Combined sick leave and sickness and accident insurance benefits ...
Long-term disability insurance

Chapter 5. Medical care, dental care, and life insurance . . .
Medical care
Coverage of selected categories of medical care .
Funding arrangements ... .
Payment arrangements .
Overall limitations ...
Hospital coverage .
Surgical coverage .
Mental health coverage ...
Alcohol and drug abuse treatment
Health maintenance organizations
Cost containment ................
Other health benefits .
Vision care.........
Employee contributions . ..
Participation requirements



Table 93. Defined benefit pension plans: Percent of
full-time participants by type of vesting schedule, medium
and large firms, 1989

Profes-
sional | Techni- | Produc-
; Alt par- | 2% | cal and | tion and
Type of vesting schedule ticipants adminis-| clerical | service
trative | partici- | partici-
partic. | pants | pants
pants
Total .. 100 | 100 | 100 | 100
immediate full vesting ... a) ® (a) oy
Cliff vesting* 89 88 88 90
Full vesting:
At any age 74 74 68 7
Less than § years’ service ° e) 0) -
5 years’ service a4 46 44 42
6.9 years’ service rv) 1 a iV)
10 years’ service 29 27 23 34
More than 10 years’ service... () (9) O) 1
After specified age 15 14 20 12
5 years’ service 6 7 8 5
10 years’ service 9 7 12 8
‘Sum of age plus service iv) © el 0
Graduated vesting® W 12 12 10
Full vesting after:
Less than 7 years’ service 1 e eQ 1
7 years’ service 1 1 (9) 1
10 years’ service 7 6 7 7
11-14 years’ service iv) iv) 1 ro)
16 years’ service 2 3 2 1
Other’. 1 2 2 1

Excludes supplemental pension plans.

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

© Less than 0.5 percent.

* Under a cliff vesting schedule, an employee 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. As a consequence of the Tax Reform Act of 1988, sponsors of
most single-employer plans who adopt this form of vesting must convert to
a 5-year schedule during 1989. Collectively bargained single-employer
plans must comply by the earlier of: (1) the expiration date of the collec-
tive bargining agreement, or (2) January 1, 1991,

® Sponsors may exclude years of service completed before age 18
‘from counting towards satisfaction of minimum vesting standards.

* Graduated vesting schedules give an employee rights to a gradually
increasing share of pension benefits determined by years of service, even-
tually reaching 100-percent vesting status. During 1989, as a result of the
Tax Reform Act of 1986, sponsors of most single-employer plans who
adopt this form of vesting must alter their schedule to provide full vesting
by the end of 7 years of service.

? Participants in this group were in plans which call for 50-percent vest-
ing after 5 years of service if age plus service equals 45. Thereatter, the
vested percentage increases 10 percentage points each of the next 5
years.

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

103



Table 55. Medical care benefits: Percent of full-time

contribution, medium and large firms, 1989

participants in contributory plans' by type and amount of employee

‘i , Non-health maintenance
All plans Health maintenance organizations organizations
Type and amount of contribution
Employee cover- Family Employee cover- Family Employee cover- Family
age coverage? age coverage? age coverage*
All participants

Total 100 400 100 100 100 400
Flat monthly amount 80 80 79 80 80 8t
Less than $5.00 5 1 4 rv) 5 2
$5.00-$9.99 9 4 12 3 9 5
$10.00-$14.99 16 4 19 4 16 4
$15.00-$19.99 W 4 8 3 12 4
$20.00-$29.99 16 7 16 5 16 7
$30.00-$39.99 9 6 2 6 8 6
$40.00-$49.99 3 6 2 9 3 5
$50.00-$59.99 1 5 3 4 1 6
$60.00-$69.99 8 1 7 o) 8
$70.00-§79.99 0. 6 ) 7 0 4
$80.00-$89.99 6 5 tv) 7 8 4
$90.00-$99.99 - 4 - 5 - 3
$100.00-$124.99 i) 6 o) 5 ) 6
$125.00-$149.99 iy) 4 - 4 °) 4
$150.00-$174.99 - 6 - 4 v 7
$175.00-$199.99 ) 1 - 1 6 i
$200.00 or greater - 2 - 3 - 2
Composite rate* 3 2 1 1 3 2
Amount varies by employee’ . 12 8 9 8 12 8
‘Amount varies by earnings 1 2 - i) 1 2
Not determinable 8 10 12 13 7 9

Professional and administrative
Total 100 100 100 100 100 100
Flat monthly amount 16 78 80 78 75 78
Less than $5.00 4 1 5 1 4 1
$5.00-$9.99 i 3 13 3 4 3
$10.00-$14.99 7 4 18 3 7 4
$15.00-$19.99 1” 3 8 3 12 4
$20.00-$29.99 16 6 16 5 15 6
$30.00-$39.99 8 8 12 8 7 7
$40.00:$49.99 4 7 3 9 4 7
$60.00-$59.99 1 8 2 5 1 6
$60.00-$69.99 i) z QO 6 ©) 8
$70.00-$79.99 iv) 5 iy) 8 9) 5
$80.00-$89.99 2 5 io) 9 3 4
$90.00-$99.99 - 4 - 4 - 4
$100.00-$124.9: ? 0) 6 i) 7
$125.00-$149.99 3 - 4 i) 3
$150.00-$174.99 2 3 - 3 ~ 3
$175.00-$199.99 i) 2 - 2 (a) 2
$200.00 or greater .. - 3 - 2 - 3
Composite rate’ 1 2 1 2 1 2
‘Amount varies by employee 16 12 4 9 18 13
Amount varies by earnings .. 1 2 - 0 1 4
Not determinable .. 7 8 9 13 6 7

See footnotes at end of table.

63



Table 37. Health care benefits: Percent of full-time participants by coverage for selected categories of care, medium and

large firms, 1989—-Continued

Care provided
Category of medical care Total Subject to Subject to | Subject to | Ce hee Pro-
Alt Covered in full | internal limits | overall limits | internal and vides
only? only® overall limits
Technical and clerical _
Hospital room and board 100 98 (227 2 a4 31 2
Hospitalization—-miscellaneous =
services 100 98 22 2 44 31 2
Extended care facility® 100 81 9 7 14 40 19
Home health care® 400 79 23 16 32 24
Inpatient surgery 100 98 31 () 61 6 2
Outpationt surgery* 100 98 37 °) 55 5 2
Physician visits—in hospital 100 98 25 0) 62 1 2
Physician visits—otfice 100 98 9 14 ial 4 2
Diagnostic X-ray and laboratory 100 98 29 ¢) 60 9 2
Prescription drugs—nonhospital 100 96 3 32 59 2 4
Private duty nursing .. 100 88 19 1 60 8 12
Mental health care 100 7 ) 22 1 74 3
In hospital . 400 96 3 20 r) 64 4
Outpatient . 100 94 1 22 2 70 6
Vision 400 36 5 29 1 1 64
Alcohol abuse treatment .. 100 97 2 4 2t 60 3
Drug abuse treatment 400 96 2 14 22 59 4
Hospice .... 100 47 9 7 19 12 53
Production and service
Hospital room and board ..... 100 98 14 5 40 38 2
Hospitalization—miscellaneous
services* 400 98 14 8 40 38 2
Extended care facility’. 100 80 5 2 13 41 20
Home health care® 100 70 16 10 18 25 30
Inpatient surgery 100 98 33 1 53 12 2
Outpatient surgery* 100 98 96 0) 49 12 2
Physician visits—in hospital 100 98 20 1 54 23 2
Physician visits—office 400 95 8 8 a 7 5
Diagnostic X-ray and laboratory 400 98 26 0) 86 16 2
Prescription drugs—nonhospital 100 94 3 27 62 2 6
Private duty nursing 100 84 1 1 65 7 16
Mental health care 100 97 oO 49 1 7 3
100 96 3 18 5 70 4
100 89 0) 19 3 67 "1
100 35 4 29 1 2 65
100 96 1 16 20 60 4
Drug abuse treatment .. 100 96 1 15 20 60 4
Hospice 100 36 8 7 9 12 64

* For all but vision care, percents include employees who elected to
waive participation in their employer's medical program but who enrolled in
dental and/or vision plans.

? Internal limits apply to individual categories of care, e.g., separate
limits or benefits for hospitalization. Limits may be set in terms of dollar
ceilings on benefits, a requirement that the participant pay a percentage of
costs (coinsurance), or a requirement that the participant pay a specific
amount (deductible or copayment) before reimbursement begins or serv-
ices are rendered.

* Overall limits are expressed only in terms of total benefits payable un-
der the plan, rather than for individual categories of care. Limits are set
as deductibles, coinsurance percentages, and overall dollar li

49

benefits.

* Services provided during a hospital confinement.

* Some plans provide this care only to a patient who was previously
hospitalized and is recovering without need of the extensive care provided
by a general hospital.

* Charges incurred in the outpatient department of a hospital and out-
side of the hospital.

* Less than 0.5 percent.

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



Table 86. Defined benefit pension plans:' Percent of full-time participants by minimum age and associated service
requirements for nornial retirement,’ medium and large firms, 1989

Profes- Profes-
sional |Technical| Produc. sional Technical, Produc,
servi fe | Allpar- | and ad- Jand cler-| "On OPS To ang recuitement | All par | and ad- Jand cleri-) “on and
Age and service requirement? | geipants | ministra-| cal par- | Service || Age and service requirement’ | ticipants | ministra- | cal par- | Paver,
tive par- | ticipants | PN tive par- | ticipants | Pane
ticipants Par ticipants pants
Total yoo | 100 | 100 | 100
‘Age 62 22 20 24 23
No age requirement | 8 4 6 4 No service requiremen 6 7 8 5
Fewer than 30 years’ service.) (‘) 0) 0 0) 1-4 years’ service 1 ) “0 1
30 years’ service | 7 3 5 i“ 5 years’ service .. 1 1 1 1
More than 30 years’ service.) (‘) 0) 0) (0) 6-9 years’ service 0) i) ) ro)
10 years’ service 10 6 6 1
Less than age 50 ) 0) i) - 11-14 years’ service ..... “ ) ) rc)
15 years’ service 0) iv) 0 - 15 or 20 years’ service .. 2 2 2 1
25 years’ service 1 1 1 iv)
Age 55 3 4 2 3 30 years’ service 2 1 5 1
10 year vice 10) oO iv) oO More than 30 years’ service 1 1 1 oO
20 years’ service 1 3 1 1
25 years’ service ) ty) ) ()_ [Age 63-64 2 1 3 3
30 years’ service “| 4 1 1 2 No service requirement 0) 0) 0 0
More than 30 years’ service.) (‘) ) - 0) 10 years’ service 2 1 3 2
20 years’ service 0) - - 0)
Age 56-59 Q oO Oo QO 30 years’ service io) Q iv) ie)
45 or 20 years’ service .) - - i)
30 years’ service 0 i) Oo O |Age 65 ... 38 4 40 35
No service requirement 33 36 35 31
13 15 12 12 1-4 years’ service ty) 7) 1 6
4 5 4 4 5 years’ service . 2 2 2 1
1-5 years’ service . 2 3 2 1 10 years’ service 2 2 1
10 years’ service 2 2 2 1 15 or more years’ service 1 1 2 0)
15 or 20 years’ service 1 1 1 1
25 years’ service 0) 0) ) ()_ |}Sum of age plus service* 12 1 "1
30 years’ service 3 2 3 4 Equals fewer than 80 1 2 1
More than 30 years’ V) iy) 0 o H 0 1
4 6
Age 61 1 1 1 1 iv) iv) iv)
20 or fewer years’ service 1 1 1 1 . 4 4 4
26-29 years’ service .. is) iV) iv Oo Equals 91-94 1) } @ QO
Equals 95 QO iv] (9) -
Equals more than 95 0) 6 a 7

* Excludes supplemental pension plans.

2 Normal retirement is defined as the point at which the participant
could retire and immediately receive all accrued benefits by virtue of
service and earnings, without reduction due to age.

* If a plan had alternative age and service requirements, the earliest
‘age and associated service were tabulated; if one alternative did not
specify an age, it was the requirement tabulated.

98

“Less than 0.5 percent.
* In some plans, participants must
service requirement.

also satisfy a minimum age or

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



Table 20. Paid sick leave: Percent of full-time employees by
type of provision, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
and | cat and | tion and

Provision ese, |adminis-| clerical | service
Ploy trative | employ- | employ-
5
employ-| ees | ees
ees
Total... 100 | 100 | 100 | 100 |
Provided paid sick leave 68 93 87 44
Sick leave provided on:
An annual basis only’ St 62 64 37
A per disability basis oni 9 16 10 5
Both an annual and per
disability basis 6 8 10 2 |
As needed basi 3 7 2 v)
Other basis® “ “ 1 i)
Not provided paid sick leave 32 7 13 56

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

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

* Plan does not specify maximum number of days.

* 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
@ certain service period.

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

23



White-collar

@ Sick leave only
© Sickness and accident only

& No coverage

Chart 1. Short-term disability benefits: Percent of full-time white- and
blue-collar employees, medium and large firms, 1989

O Sick leave and sickness and accident insurance

Blue-collar

niority, and the number of days with partial-pay benefits
decreased. It was rare for participants to receive only par-
tial pay benefits, regardless of length of service.

Sick leave plans commonly had a short service require-
ment, generally 3 months, before new employees became
eligible for benefits. About one out of seven of the sick
leave participants had to wait 1 to 5 days before receiving
benefits, at 1 year of service. These waiting periods were
often reduced or eliminated after 10 or 15 years of service.

While sick leave is commonly thought of as replacing
Jost income while an employee is ill or injured, the survey
found that some workers could use their benefits for other
reasons. For example, using sick leave to attend a funeral
{available to 11 percent of annual and 1 percent of per dis-
ability sick leave participants), or to take care of personal
business (19 percent annual and 2 percent per disability)
were the most common provisions.

Sickness and accident insurance

Sickness and accident insurance plans protected 43 per-
cent of all employees against income losses due to short—

19

term disabilities. Four-fifths of the participants had their
benefits fully paid by their employer. The remainder most
often paid a fixed contribution, usually between $2 and $3
a month, or paid a percent of monthly earnings (tables 18,
26 to 28).

Benefit payments under sickness and accident insur-
ance plans were either a percent of employee earnings or a
scheduled dollar amount. White-collar participants were
more likely to be covered by plans with earnings—based
formulas than were blue-collar participants.

Under earnings—based formulas, the percent of earnings
was usually fixed—typically 50 to 67 percent—although
some plans varied the percentage by length of service or
length of disability. Sixty-six percent of participants in
earnings—based plans had a dollar limit on the amount of
the weekly benefit. Blue-collar workers were the most
common recipients of scheduled dollar benefits, which
provided either a fixed weekly amount (usually between
$100 and $180) or varying weekly benefits (usually based
on earnings).

Plans that placed a fixed maximum on the number of
weeks of coverage, commonly 26 weeks, covered 96 per-



Table 92. Defined benefit pension plans:' Percent of full-time participants in plans granting ad hoc postretirement annuity
Increases,’ medium and large firms, 1989

Protes- Profes-
a sional |Tectnicl nee sional [Technical] Produe,
“ti par- | and ad- | and cler 5 All par- | and ad- |and cleri-
Characteristic ticipants | ministra- | cal par- | Serco Characteristic ticipants | ministra- | cal par- | Service
tive par- | ticipants | PON tive par- | ticipants | Partict
ticipants Pant ticipants pants
Percent of participants in plans Benefit formula for most
with at least one postretirement recent Increase
increase in the 1984-88 period .| 22 24 7 26
Total 100 | 100 | 100 400
Number of increases granted in
past 5 years Flat increase 56 6 67 50
Monthly dollar amount .. 8 7 7 10
100 100 100 100 1 - - 1
2 3 2 1
54 54 64 51 1 2 2 )
29 33 27 28 i) - - ty
13 5 4 20
iv) 1) ) 1 2 2 8
Five or more 3 7 5 - 54 61 40
26 28 20
Provision for minimum increase| 2 4 3
in most recent adjustment 3 oy :
1 1 1
Total 100 | 100 400 | 100 - - 0
1 1 1
No minimum 92 90 90 93 } 1 0
With minimum 6 8 9 3 1 2 i)
Monthly dollar amount 4 6 6 2 Varies by date of
$10. 2 2 4 2 retirement . 19 19 24 16
$16 .. is) iy) 1 iv] Type of flat increase not
$28 .. 2 2 i) determinable .. v) ) i) rs)
More than $25 0) iV) iv) -
Varies by date of Increase per year of retirement 15 22 21 9
retirement (o) 1 - - Percent of present benefit 15 22 21 9
Percent of present 2 1 3 1 Less than 2.0 7 8 10 6
Not determinable .. 2 2 1 3 2.0 3 6 3 2
25 1 1 2 ie)
Provision for maximum 3.0 1 1 2 ro)
Increase in most recent 40 2 4 3 c)
adjustment 44-49 ro) 2 - -
Varies by date of
Total ... 100 100 100 100 retirement .. | 6 1 a)
Type of increase per year of
No maximum .. 93 90 92 9 ‘etirement not determinable .| (7) iv) e
With maximum 4 7 7 2
Monthly dollar amout 1 1 iv] €) __||Increase per year of service .. 24 10 9 36
$100 or less @ @ ey Monthly dollar amount . 24 10 8 35
$101-$150 . iy) i) eo - $.50 .. 4 1 1 6
$151-$200 . iv) 1 - - $.51-8.99 1" 7 5 14
Percent of present benefit 4 6 6 2 $1.00 7 a 1 "
Less than 10 .. - - - - More than $2.00 .. 1 e 0) 1
15419 2 2 3 1 Varies by date of
20-24 i) iy) 1 © retirement .. 2 - 1 3
30 or 2 4 2 i) Percent of present 1 i) 0 1
Not determinable 2 2 1 3 eo 6 0 °
1 - - 1
[Combination of two or more
benefit formulas 2 8 2 1
IType of formula not determinable 2 2 1 3

* Excludes supplemental pension plans.
® Unscheduled increases in pension payments for employees retiring
prior to 1989. Excludes one-time lump-sum payments.

® Less than 0.5 percent.

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

totals. Where applicable, dash indicates no employees in this category.

102


Table 26. Sickness and accident insurance: Percent of full-time participants by type and duration of payments, medium and
large firms, 1989—Continued

‘Maximum weeks of coverage

Type of payment Total

14.25 26 2751 52 Over 52 | Varies by

Less than
13 id service

Production and service—Continued|

Other percent ..

Percent of earnings varies
By service

By length of disability .

By both service and length of
disability

By earings ..

2 - 0 19)
1 - ” 0)

33s

0 > - ~

2

VYOARBOVADRH

Fixed weekly dollar benefit
Less than $60

$100-$119
$120-$139
$140-$159
$160-$179
$180-$199
$200-$219
$220 or more

Sransane

a+anweaooniad
BSrrvs

10 - 3
- 3
- oy : ‘)

Weekly dollar benefit varies
By earnings ..
By service or

Vos
‘
‘
aon
3

* Less than 0.8 percent. NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category.

31



Table 100. Retirement and capital accumulation plans:
Percent of full-time participants by combinations of plans,
medium and large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and

Type of plan ots adminis-| clerical | service
trative | partici | partici
partic | pants | pants
Pants

Total 100 | 100 | 100 | 100

76 74 76 78

Defined benefit pension
With:

No other plan 42 32 37 50
Profit sharing’ 6 4 5 7
Savings and thrift. 24 32 29 7
Stock? 2 1 1 2
Profit sharing! and saving 1 3 2 1)
Profit sharing’ and stock’ iv) iv) ie) e)
Savings and stock? .. @) 4 1 Vv)
Money purchase pension 1 1 © 1
‘Other combinations .. Vv) iv) e) Vv)
Profit sharing!
With:
No other plan 8 6 6 W
‘Savings and thrift. 1 1 1 1
Stock’ .. 1 1 1 17)
Savings and stock’ e e €) @
Money purchase pension ® ®) ® 1]
Other combinations .. co) a) a) i)
Money purchase pension
With:

No other plan 4 6 2

1 1 1 a)

Savings and thrift.
Stock’ ..
Savings and stock®
Savings and thrift
With:

No other plan
Stock? ..

8 9 8 7
is) ia) e 0
Stock’plan

With:

No other plan

* Excludes pure cash profit sharing plans.
= Employee stock ownership plans (ESOP’s) and stock bonus plans.
* Less than 0.5 percent.

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

112

Table 101. Cash or deferred arrangements:' Percent of
full-time employees participating in plans permitting
employee contributions with pretax dollars, medium and
large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and
Item aiaseang |adminis-| clerical | service
Ploy« trative | employ- | employ-

employ-| ees | ees

ees
Percent of all employees in plans
with cash or deferred arrangement 4 54 45 31

38 52 43 28
28 39 33 19
4 4 3 5

Salary reduction plans’ ..
Savings and thrift plans
Profit sharing plans ..
Supplemental contributions to

money purchase pension plans] 1 2 2 i)
Freestanding accounts* . 5 4
Other® (a) - - i)

Regular contributions to pension

plans on a pretax basis 1 2 1
Defined benefit plans® iv e) iv} e)
Money purchase plans 2 1
Deferral of profit sharing allocation’.). 2 1 2 2

* Tabulations show percent of employees participating in plans that al-
low income, and associated tax, to be deferred. Not all participants may
elect to have their income deferred, Includes employee contributions to re-
tirement plans under several sections of the Internal Revenue Code (IRC).
Excludes pretax contributions for insurance, dependent care, and other ex-
penses under IRC section 125.

? Employee may elect to make pretax contributions to a long-term sav-
ings or retirement account.

® Less than 0.5 percent.

+ Employer contributions are not made to the plan.

® Employee may allocate funds in a flexible benefits plan to a retire-
ment account.

* Required employee contributions to a defined benefit pension plan
are made on a pretax basis, but an account separate from the pension
plan is not established for these savings.

” Employer profit sharing distribution may be taken in cash by the em-
ployee, triggering current year tax liability, or may be deferred into a long
term account, with corresponding deferral of taxes.

NOTE: Sums of individual items may not equal totals either because of
rounding or because some employees participate in more than one type of
plan. Where applicable, dash indicates no employees in this category.



Table A-4. Standard errors for table 23 ~ 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, 1989

Profes- Profes-
sional | Techni- | Produc- sional | Techni- | Produc-
All and_ | cal and | tion and All and | cal and | tion and
Item Partici- | admini- | clerical | service Item Partici- | admini- | clerical | service
pants | strative | partici- | partici- Pants | strative | partici- | partici-
partici- | pants | pants partici | pants | pants
pants pants
Att year of service: JAt 15 years of service:
Cumulative pian | 03 0.2 0.4 0.4 || Cumulative plan 1 12 09 WwW
With sickness and With sickness and
accident insurance...) 3. 2 3 6 accident insurance 1.0 14 141 12
Without sickness and ‘Without sickness and
accident insurance.....| 4 3 5 4 accident insurance .. 15 1.8 141 27
Noncumulative plan .. | 1.9 24 22 1.4 || Noncumulative pian 24 3.0 34 22
With sickness and With sickness and
accident insurance.....| 6 7 8 5 accident insurance 29 44 25 12
Without sickness and Without sickness and

accident insurance 23 28 24 22 accident Insurance .....| 3.2 38 3.9 45

At 5 years of service: ‘At 20 years of servic
Cumulative pian .. 5 5 4 8 Cumulative plan 11 1.2 1.0 17
With sickness and With sickness and
accident insurance ... 7 8 7 a accident insurance .. 1 15 12 13
Without sickness and Without sickness and
accident insurance 7 7 5 12 accident insurance...) 1.5 1.6 1.2 27
Noncumulative plan 20 | 24 24 1.9 |} Noncumulative plan .. 25 34 3.2 24
With sickness and With sickness and
accident insurance ...... 16 26 16 7 accident insurance ....| 3.4 51 28 14
Without sickness and Without sickness and
accident insurance a7 | 34 28 37 accident insurance...| 33 | 40 | 40 47
At_10 years of service: |At 25 years of servic
‘Cumulative plan 1.0 14 9 1.6 || Cumulative plan .. 141 1.2 1.0 17
With sickness and With sickness an
accident insurance 1.0 13 13 12 accident insurance 12 16 12 13
Without sickness and Without sickness and
accident insurance 13 1.4 1 24 accident insurance 15 16 1.2 27
Noncumulative plan 23 30 | 29 | 21 |) Noncumutative plan ... 26 a4 3.3 26
With sickness and With sickness and
accident insurance 26 | 38 | 22 1.0 accident insurance ....| 3.6 55 | 34 16
Without sickness and Without sickness and
accident insurance......| 3.2 37 | 36 | 43 accident insurance...) 3.4 41 44 49

133


Table 46. Medical care benefits: Percent of full-time
Participants in plans with inhospital surgical benefits by
comparison with outpatient surgical coverage, medium and
large firms, 1989

Table 47. Medical care benefits: Percent of full-time
Participants in plans with inhospital surgical benefits by
second surgical opinion provisions, medium and large firms,
1989

Profes- Profes-
sional | Techni- | Produc- sional | Techni- | Produc-
‘al par-| and | cal and | tion and ‘All pare |_29d_ | cal and | tion and
Outpatient surgery ticipants |@0minis-| clerical | service Item ticipants |@0TMinis-| clerical | service
p trative | partici- | partici- ip tative | partici- | partici-
partici- | pants | pants partic | pants | pants
pants pants
Total 100 | 100 | 100 | 100 Total 100 | 100 | 100 | 100
Coverage the same as inhospital With second surgical opinion
surgery 7m | 7} 1 | 75 provision .. ss | 60 | so | 57
Coverage differs from inhospital Plan pays for, but does not
surgery... 26 | 2 | 29 | 6 provide incentives for, second
opinions .. | 22 22 23 a
Goinsurance rate higher for
‘outpatient surgery a a1 | 23 | 20 Plan provides incentives for
100 percent 20 | 20 | 23 | 18 second opinions. se | 38 | 36 | 36
90 percent or 95 percent 1 1 1 2
Other differences 5 3 5 6 For selected procedures’ 20 | 2 | 28 | a0
No payment without ,
* Includes plans under which inhospital surgery is subject to the overall Bena pclae 1 ° o 1
plan deductible while outpatient surgery is not, and plans where inpatient e
and outpatient surgery have different deductibles, without second opinion .| 28 28 28 29
For all procedures 5 6 5 4

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

55

Reduced coinsurance
without second opinion . 1 1 2 ia)
‘Schedule of payments
lower without second

opinion 1 2 1 1
Other lower payments 3 3 2 3
Details of incentive. not
available 2 3 2 2
Without second surgical opinion
provision ... 42 40 at 43

' Procedures most commonly mentioned were tonsillectomy, adenoid-
‘ectomy, hysterectomy, surgery of the nose or back, removal of the gall
bladder, and coronary bypass surgery.

® Less than 0.5 percent.

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



Chart 6. Savings and thrift plans: Percent of
full-time participants by availability of loan
provisions, medium and large firms, 1985-89
Percent
50
40 4
Ea
30 - :
% fee :
20+ —
10+ —
. ae
| e
o
as
°
1988 1989

mon investment vehicles offered by these plans included
company stock, common stock funds, guaranteed invest-
ment contracts, government securities, money market
funds, and long-term interest bearing securities such as
corporate bonds and Treasury notes. The number of
choices in these plans varied from two to five or more, with
three choices being the most common. Employees were
nearly always allowed to split their contributions among
the various options and were allowed to change their in-
vestment choices periodically.

Employees generally had less flexibility when it came to
employer contributions. Just over half of the participants
were permitted to choose how the matching contribution
was to be invested. Where no choice was permitted, the
plan typically specified that the matching contribution
was invested in company stock.

Withdrawals and loans (table 107). Prior to normal pay-
out at retirement, disability, or termination of employ-
ment, 71 percent of the participants in savings and thrift
plans were allowed to withdraw all or a portion of employ-
er contributions. However, 34 percent were only allowed
to withdraw employer contributions for hardship reasons,
such as medical or educational expenses. The remaining

109

participants could withdraw employer contributions for
any reason.
‘Withdrawals of employer contributions were also sub-

ject toa variety of other restrictions. For example, 15 per-
cent of participants who could make withdrawals could
only withdraw part of their employer’s contribution. And
36 percent of participants who could make withdrawals
had a penalty imposed if they did so. Most commonly,
penalties involved suspending employee contributions,
and employer matching contributions, for a given period,
such as 6 months or 1 year. Other penalties included sus-
pending employer matching contributions only, or forfeit-
ing nonvested employer contributions.

Another method of accessing an employee’s account

prior to final payout is through loan provisions—36 per-
cent of participants in savings and thrift plans were al-

lowed to borrow from their accounts. (See chart 6.) Eight
percent of participants allowed to borrow were restricted

to loans for emergency or hardship situations. Loans were
generally required to be repaid within 5 years, but longer
payment periods applied for home purchase or renovation
loans. :

Interest rates on employee loans were typically deter-
mined by a specific economic indicator (such as the prime



|
iH

Table 67. Dental care benefits: Percent of full-time participants in contributory stand-alone plans' by type and amount of
employee contribution, medium and large firms, 1989
i Employee Family ati Employee Family
Type and amount of contribution coverage coverage? Type and amount of contribution coverage coverage?
All participants Technical and clerical
Total 100 100 Total 100 100 |
Flat monthly amount .. 70 74 Flat monthly amount 69 72 |
Less than $2.00 10 1 Less than $2.00 7 1 |
$2,00-$4.99 33 8 $2,00-$4.99 98 6
$5.00-$9.99 2t 20 $5.00-$9.99 19 16
$10.00-$14.99 3 21 $10.00-$14.99 3 27
$15,00-$19.99 ® 10 $15.00-$19.99 i) 7
$20.00-$24.99 io) 5 $20.00-$24.99 e) 6
$25.00 or greater .. - 6 $25.00 or greater .. ~ 8
Composite rate* 3 3 Composite rate* 1 2
Amount varies by employee” 22 7 ‘Amount varies by emptoyee® 25 20
Amount varies by earings ® ® |Amount varies by earnings oy i) i
Not determinable 8 9 INot determinable 6 7 i
Professional and administrative Production and service
Total 100 100 Total .. 100 100
Flat monthly amount 64 69 IFlat monthly amount 76 80
Less than $2.00 9 1 Less than $2.00 14 1
$2.00-$4.99 29 8 $2,00-$4.99 . 33 10
$5.00-$9.99 20 18 $5.00-$9.99 .. 22 24
$10.00-$14.9 3 19 $10.00-$14.99 2 18
$15,00-$19.99 io) 9 $15.00-$19.99 ro) 14
$20.00-$24.99 io) 5 $20.00-$24.99 ro) 5
$25.00 or greater .. - 7 $25.00 or greater .. _ 4 i
Composite rate* 2 3 Composite rate* 5 4
Amount varies by employee* 28 a |Amount varies by employee* 15 1"
Amount varies by earnings ... (a) 0) [Amount varies by earnings o) )
Not determinable 8 10 INot determinable . 9 10

area, for example, health care.and sickness and accident insurance. Cost i
data for individual plans cannot be determined.

* Plans that exclusively provide dental benefits
If the amount of contribution varied by either size or composition of
family, the rate for an employee with a spouse and one child was used. * Amount varies by options selected under a “cafeteria plan” or bal-
For a small percentage of employees, the employee contributes the same ance of employer-sponsored reimbursement account,
amount for single and family coverage. |
* Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may not equal to-
“ A composite rate is a set contribution covering more than one benefit _tals. Where applicable, dash indicates no employees in this category.

3


Table 21. Paid sick leave: Percent of full-time employees by sick leave provision, medium and large firms,

1989—Continued

Profes- Profes-
sional | Techni- | Produc- sional | Techni | Produc-
‘Alem. |_ 27d | cal and | tion and ‘Alem. | and. | cal and | tion and
Sick leave policy’ rovess |#0minis-| clerical | service Sick leave policy’ loyens |20minis-| clerical | service
Ploy trative | employ- | employ- Ployees | ‘trative | employ- | employ-
employ-| ees | ees employ-| ees | ces
ees ees
Sick leave provided on a per At 10 years of
disabitity basis’ ... 18 24 20 7 service—Continued
120 and under 180 days.) 4 7 4 2
At 6 months of servic 180 days or more . 0) 1 0 )
Under 5 days ) 1 1 0)
5 and under 10 day: 2 4 3 1 At 15 years of servic
10 and under 30 days 4 8 5 1 Under 5 days .. ) ) oO V)
30 and under 60 days 0) 1 1 ) 5 and under 10 days 1 1 1 Oo
60 and under 120 days 1 3 1 0 10 and under 30 days .. 1 1 1 o
120 and under 180 days..) 1 3 1 ) 30 and under 60 days .. 2 2 4 )
180 days or more...) (4) () vl - 60 and under 120 days .... 4 7 5 1
120 and under 180 days..| 7 "1 9 3
At 1 year of servi 180 days or more .. | 1 iv) )
Under 5 days iy) iy) i) 1
5 and under 10 days 1 2 2 1 At 20 years of service:
10 and under 30 days 5 9 7 2 Under 5 days iv) iv) rv) )
30 and under 60 days 1 a 2 ” 5 and under 10 days vv) 1 1 1 o
60 and under 120 days 2 3 1 1 10 and under 30 days .....| 1 1 1 0)
120 and under 180 days 2 3 1 1 30 and under 60 days 1 1 3 i)
180 days or more O oO 10) - 60 and under 120 days .... 4 7 4 1
120 and under 180 days.) 5 10 7 2
At 5 years of service: 180 days or more .. 2 3 3 2
Under 5 days .. iv) o 0 }
5 and under 10 days, 1 1 1 ra) At 25 years of servic
10 and under 30 days .. 2 3 2 1 ) oy Oy i)
30 and under 60 days .. 3 5 5 0) ay: 1 1 1 Oo
60 and under 120 days 5 9 7 3 10 and under 30 days 1 1 1 0
420 and under 180 days..) 2 5 2 1 30 and under 60: days 1 1 3 ty)
180 days or more 0 0) ) - 60 and under 120 days 3 6 4 1
120 and under 180 days 6 "1 7 2
At 10 years of 180 days or more .. 2 3a 3 2
service:
Under 5 days .. ) 0) v) o) As needed basis” a 7 2 o)
§ and under 10 days 1 1 1 0)
10 and under 30 days . 1 1 1 ry Other basis* O) 0 1 )
30 and under 60 days .. 2 4 5 1
60 and under 120 days 6 9 8 3 ||Not provided paid sick leave .. 32 7 13 56

* Some plans grant sick leave at partial pay, either in addition or as
an alternative to full-pay provisions. Employees receiving partial pay
only or no sick leave in their early years of service are included in the
‘overall percentages of workers provided sick leave; however, they are
disregarded in computing the distributions by length of service up to the
service period at which they become eligible for full sick leave pay.

* The total is less than the sum of the individual breakdowns be-
cause some employees had annual and per disability plans.

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

* Less than 0.5 percent.

25

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

* Employees earn a specified number of sick leave days for each ill
ness or disability.

” Plan does not specify maximum number of days.

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

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



Table 80. Defined benefit pension plans:' Percent of full-time participants with earnings-based benefit formulas, by
definition of earnings, medium and large firms, 1989

Terminal | Career Terminal | Career
Definition of earnings Total’ | earnings | earings Definition of earnings Total® | earnings | earnings
formula | formula formula | formula
All participants Technical and clerical
Total 100 100 100 Total 100 100 100
Basic, or straight-time, earings only| 53 55 56 |/Basic, or straight-time, earnings only] 89. 60 56
Basic, or straight-time, earnings plus Basic, or straight-ime, earnings plus
other earnings . 47 45 44 other earnings .. a 40 44
Overtime 37 38 34 Overtime .. 36 35 40
Shift differentials . 30 25 34 Shift differentials 24 22 34
Bonuses . 29 29 25 Bonuses . 25 26 19
Commissions... 28 23 30 ‘Commissions 23 a 29
Definition of eamings not Production and service
determinable iv) © -
Total 100 100 100
Professional and administrative
[Basic, or straight-time, earnings only| 51 53 68
Total 100 100 400
IBasic, or straight-time, earnings plus
Basic, or straight-time, earnings only] 50 53 43 other earnings 49 47 32
Overtime .. 37 39 27
Basic, or straight-time, earnings plus Shift differentials 33 28 23
other earings . 49 47 87 Bonuses 29 34 22
Overtime .. 39 38 38 Commissions 30 24 24
Shift differentials 30 25 45
Bonuses .. 3t 29 33
Commissions 29 25 37
Definition of earings not
determinable . rv) i) -

* Excludes supplemental pension plans.
? Includes plans with benefit formulas based on a dollar amount that

varies by earnings.
2 Less than 0.5 percent.

NOTE: Sums of individual items may be greater than totals because

more than one type of earnings may be included in this definition.
‘Where applicable, dash indicates no employees in this category.

91

|
|



Chapter 2. Highlights of
Plan Provisions

Although employees in different establishments may all
be covered by a certain benefit, the characteristics of their
plans may differ considerably. For example, the number
of annual paid holidays reported in the survey ranged from
5 or fewer in some establishments to 14 or more in others.
Similarly, benefit patterns may vary by occupational
group. For example, pensions of white-collar employees
are more likely to be based on earnings and coordinated
with Social Security: benefits than are those of blue-collar
workers. Nevertheless, overall tendencies can be seen, and
are summarized below.

Paid time off

When paid leave was provided, covered employees re-
ceived on average:

Rest periods of 26 minutes a day;
9 holidays each year;

Vacations of 9 days at 1 year of service,17 days at 10
years, and 20 days at 20 years;

3 days of funeral leave per occurrence;
12 days of military leave per year;
Jury duty as needed.

Paid and unpaid parental leave

The average length of unpaid parental leave was about
20 weeks;

Paid maternity or paternity leave was rare.

Disability benefits

Short-term disability benefit plans, on average, provided:
Sick leave of 21 days per year with full pay at 5 years of
service;
Sickness and accident insurance benefits for about 26
weeks.

Long-term disability insurance typically:
Replaced 50 or 60 percent of income;

Began after 6 months of disability.

Medical care, dental care, and life insurance

For employees participating in medical care, dental care,
and life insurance programs:
53 percent paid nothing for their own medical care,
and 34 percent paid nothing for family coverage.
Where workers contributed, average monthly em-
ployee premiums were $25 for individual coverage,
and $72 for family coverage.

17 percent participated in health maintenance organi-
zation plans;

10 percent participated in preferred provider organi-
zation plans, up from 1 percent in 1986;

35 percent received vision care;

84 percent were protected against catastrophic health
expenses, either through ceilings on out-of-pocket
employee.expenses or enrollment in health mainte-
nance organizations;

22 percent were eligible for some employer-financed
health care during a layoff;

42 percent were in plans that continued employer- fi-
nanced health care coverage after retirement;

Virtually all dental care participants had coverage for
preventive and restorative dental procedures, while
66 percent had coverage for orthodontia;

82 percent were covered by plans that imposed annual
limits on dental expenses, typically $1,000;

63 percent were required to have dental procedures ap-
proved by their plan if the cost of such procedures ex-
ceeded a certain amount, typically $100;

68 percent were covered by life insurance determined
by earnings; this was more common among white-
collar participants;

42 percent had insurance available on the lives of their
spouses, although the majority had to pay the entire
premium for such coverage;

42 percent were in plans that continued employer-fi-
nanced life insurance coverage after retirement.



Table 68. Life insurance: Percent of full-time participants
by method of determining amount of basic life insurance
and frequency of related coverages, medium and large

firms, 1989
Profes-
sional | Techni- | Produc-
and | cal and | tion and
ttem Al pat |adminis-| clerical | service
pi trative | partici- | particl.
partici. | pants | pants
pants
Total 100 | 100 | 100 | 100
Basic life insurance 100 | 100 | 100 | 99
Based on earnings .. 68 79 76 S7
Multiple . so | 73 | 6 | 46
Graduated schedule 9 6 7 12
Flat amount... 29 19 | 23 | 39
Flat amount based on service 2 2 1 3
Accidental death and dismember-
ment coverage nm 7o | 68 | 73
‘Survivor income benefit? .. 7 6 5 8
‘Supplemental benefits available e2 | 68 | 68 | 55
Wholly employee paid sa | s7 | s7 | 48
Dependent coverage avaitable* .. 42 | 42 | 42 | 43
Wholly employee paid 22 | 23 | 22 | 22

* A few participants received only accidental death and dismemberment

insurance or survivor income benefits.

? ‘Includes participants in plans in which insurance equaled a multiple of

earnings, plus or minus a specific amount.

* Consists of monthly income, usually a percent of earnings, for the
spouse or dependent children for a specified period after death of em-

ployee.

* in prior surveys, data for supplemental and dependent fife insurance
coverage included only those participants who could receive plans that

were at least partially employer-financed.

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

tals. Where applicable, dash indicates no employees in this category.

4


Chapter 6. Defined
Benefit Pension Plans

A defined benefit pension plan obligates an employer to
provide retirement benefits calculated through use of a
specific formula contained in the plan. Benefits generally
are based on salary, years of service, or both. An employ-
er, however, ordinarily has considerabie latitude in financ-
ing these benefits. In 1989, 63 percent of employees in me-
dium and large firms participated in defined benefit
pension plans, unchanged from the coverage reported in
1988 when the survey expanded to smaller establishments
and more service industries.

To evaluate the full extent of retirement benefits avail-
able to employees in medium and large firms, defined con-
tribution plans must also be considered. These plans,
which specify employer and, if applicable, employee con-
tributions, but do not guarantee a specific benefit, are dis-
cussed in the next chapter.

The Employee Benefits Survey found a variety of de-
fined benefit pension plan provisions. The provisions ex-
amined included: Formulas for calculating benefits, how
benefits are coordinated with Social Security payments,
ceilings on benefit payments, age and service requirements
for retirement, disability retirement benefits, adjusting ac-
crued benefits of older workers, postretirement pension in-
creases, vesting schedules, survivor annuities, employee
contributions, and plan participation requirements. To
summarize the overall effect of many of these provisions,
pension benefits and replacement rates (the proportion of
preretirement income replaced by pension payments) were
computed for workers with several assumed levels of earn-
ings and years of service. Each of these topics is discussed
in the following sections of this chapter.

Benefit formulas

Earnings-based formulas applied to 76 percent of the
employees covered by defined benefit pension plans (tables
77 to 82). Such formulas pay a percent of the employee’s
annual earnings per year of service (for example, 1.5 per-
cent of earnings times 30 years of service, or 45 percent of
annual earnings).

However, variations are common in the approach to cal-
culating annual earnings and the rate paid per year of ser-
vice. For 85 percent of the participants with earnings for-
mulas, pensions were based on earnings in the final years
of employment (terminal-earnings formula); for the re-

80

mainder, an average of career earnings was used (career—
earnings formula).

For 81 percent of the participants with terminal-earn-
ings formulas, terminal earnings were defined as the aver-
age over a 5-year period. Such formulas usually desig-
nated the 5 consecutive years with the highest earnings out
of the last 10 years before retirement.

Formulas based on terminal earnings typically provided
participants with a flat percent of earnings per year of ser-
vice. These flat rates generally ranged from | to 2 percent
of earnings and averaged 1.55 percent per year of service.

Nearly three-fifths of participants in plans with formu-
las based on percentages of career earnings had benefit for-
mulas that varied according to service, earnings, age, or a
combination of factors. For example, a plan will credit an
employee with 1 percent of earnings up to the first $12,000
in each year of service plus 1.5 percent of the earnings ex-
ceeding that amount. The annual pension payment is the
sum of these credits. (This approach is often followed to
lower employer costs for wage levels upon which Social Se-
curity taxes are paid, as described in the next section.)
Where career-earnings formulas specified a uniform per-
cent for each year of service, the average was 1.54 percent.

It is difficult to judge whether terminal— or career—earn-
ings formula plans provide the more generous pension
payment, because different variables go into computing
benefits. For example, calculated average earnings will
generally be lower under career-earnings formulas,”* but
these benefits are less likely to be offset by a retiree’s Social
Security payments. (See next section.) In addition, al-
though the average flat rate per year of service differed
only slightly between formulas, terminal—earnings formu-
Jas imposed a maximum on years of service to be included
in calculating benefits much more often than career—earn-
ings formulas. (See maximum benefits, below.)

The earnings that are used in computing both terminal-
and career-earnings formula pension benefits are very
similar. Just over half the participants were in plans that
included only “basic” earnings, that is, straight-time earn-

28 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 5-year average
would be $22,730. The difference between the career and the final aver-
ages lessens with shorter lengths of service.


ately upon, or within a few months after, the onset of a
long-term disability. White-collar workers, in contrast,
frequently do not begin to receive disability pension bene-
fits until retirement age.

Medical care, dental care, life insurance, retire-
ment, and capital accumulation plans

The incidence of medical care, dental care, and life in-
surance varied only slightly among occupational groups.
While medical care and life insurance coverage has re-
mained steady for several years, covering over 90 percent
of workers, dental care coverage has risen steadily. In
1979, 49 percent of workers participated in a dental care
plan; in 1989, 66 percent of workers were covered.

Eighty-one percent of all workers were covered by at
least one retirement plan in 1989. Defined benefit pension
plans, which specify a formula for determining future
benefits, were the most frequently observed form of retire-
ment plan, although the incidence of these plans has de-
clined in recent years. In 1979, 87 percent of workers par-
ticipated in a defined benefit plan; in 1989, 63 percent of
employees participated in such a plan. (About three—
tenths—7 percentage points—of the overall decrease
stems from the survey’s expansion in 1988 to smaller es-
tablishments and more service industries.)

In part, this decline reflects the growing popularity of
defined contribution plans, which specify an employer
contribution, but do not guarantee a benefit. Such plans
can be vehicles for financing retirement benefits if funds
can not be withdrawn easily, or they may be shorter term
capital accumulation plans, if periodic withdrawals are al-
lowed. Defined contribution plans were available to 48
percent of workers, and were more common among
white-collar than blue-collar workers. There are several
types of defined contribution plans: Savings and thrift,
profit sharing, money purchase pension, employee stock
ownership, and stock bonus plans.

Flexible benefits plans and reimbursement
accounts

Benefits may be provided to employees independently,
or as part of a package, complete with options, known as a
flexible benefits or cafeteria plan. Such arrangements give
employees the opportunity to choose between several
benefits, such as medical care, life insurance, and vacation
days, and between several levels of care within a given
benefit. Since the 1986 survey, the first to include coverage
of flexible benefits plans, the incidence of these plans has
risen steadily. Two percent of workers were eligible for
such a plan in 1986; 9 percent were eligible in 1989.

Even more dramatic is the rise in eligibility for em-
ployer-sponsored reimbursement accounts, from 5 per-
cent of workers in 1986 to 23 percent in 1989. These ac-

counts provide funds for employees to pay for expenses
not covered by existing benefit plans, such as child care ex-
penses and medical care deductibles. Accounts may in-
clude employer funds, employee funds contributed on a
pre-tax basis, or both.

Other benefits

In addition to the major benefits just described, the sur-
vey studied the incidence of 21 other benefits. These data
show the percent of workers eligible for a specific benefit,
but not the proportion of employees actually receiving it.
Generally, if these benefits were provided, they covered all
of the workers in an employee group (professional and ad-
ministrative, technical and clerical, and production and
service employees) within an establishment.

Of these benefits, the most frequently offered was em-
ployer-subsidized parking, which was available to 90 per-
cent of the employees. Parking benefits included on-site
facilities offered without charge, and reduced rates at com-
mercial lots.

Another common benefit was educational assistance,
which in general provided full or partial reimbursement of
employee expenses for books, tuition, and fees. Sixty-nine
percent of employees were eligible for job-related educa-
tional assistance, while 19 percent were eligible for non—
job-related educational assistance.

Two employer-subsidized health promotion services—
wellness programs and employee assistance programs—
were increasingly available in 1989. Employee wellness
programs were offered to 23 percent of employees, up
from.17 percent in 1988. These programs offered struc-
tured, separate plans (that is, independent of health care
benefits), such as exercise and physical fitness programs,
weight control clinics, smoking-cessation programs, and
stress management courses, to develop and maintain
healthy lifestyles. Employee assistance programs were
available to 49 percent of the workers (compared to 43 per-
cent in 1988) and provided employee referral and counsel-
ing services concerning such problems as alcoholism, drug
abuse, and emotional difficulties. Employee assistance
programs are closely related to employee wellness pro-
grams and typically deal with more serious personal prob-
lems than the essentially preventive medical issues ad-
dressed by wellness programs. An additional health-
related benefit, in-house infirmaries, was available to 36
percent of employees.

The availability of long-term care insurance was stu-
died for the first time in 1989. Three percent of employees
had such coverage available, generally purchased with em-
ployee funds at group rates.* Long-term care insurance
covers extended nursing home stays, and may be available
for employees, spouses, or other relatives.

4 See footnote 1 for an explanation of coverage.



choose between receiving currently taxable income, or def-
erring taxation by placing the money in a retirement ac-
count. Cash or deferred arrangements took the form of
either salary reduction plans, deferrals of profit-sharing
allocations, or mandatory regular contributions to a pen-
sion plan on a pre-tax basis.

Salary reduction plans (available to 38 percent of em-
ployees) allow employees to contribute a part of their earn-
ings to a retirement plan, and defer income taxes on those
contributions and their earnings until distribution. Such
contributions are referred to as “employee elective defer-
tals” or “pretax contributions.”

Deferrals of profit-sharing allocations provide em-
ployees with the choice of receiving an employer’s profit~
sharing contribution immediately in cash, or deferring the
contribution and postponing taxation until distribution.
Such arrangements were rare, as were pension plans that
allowed employees to make required contributions on a
pretax basis,

Salary reduction features, more common among white~
collar employees than among blue-collar employees, were
available through several types of defined contribution
plans. The most common vehicle for pretax savings was a
savings and thrift plan, accounting for nearly three-
fourths of participants. The remainder generally could
make salary reduction contributions through a profit-
sharing plan or a freestanding plan, that is, a plan set up for
employee salary reduction with no employer contribution.

From a different perspective, 68 percent of all partici-
pants in defined contribution plans could make voluntary
salary reduction contributions to their plan. The inci-
dence was higher for white-collar (74 percent) than for
blue-collar (60 percent) employees. The following tabula-
tion shows the percent of defined contribution plan partic-
ipants in plans with salary reduction features:

Plan ype Percent of participants
Savings and thrift . 92
Deferred profit sharing 29
Money purchase pension . 24

Savings and thrift plans

Savings and thrift plans enrolled 30 percent of em-
ployees covered by the survey—38 percent of white-collar
and 21 percent of blue-collar workers. Under these plans,
employees contribute a predetermined portion of earnings
to an account, all or part of which is matched by the em-
ployer. Contributions are invested in various vehicles,
such as stocks, bonds, and money market funds, as di-
rected by the employee or employer, depending upon the
provisions of the plan. Although usually designed as a
long-term savings vehicle, savings and thrift plans allow
withdrawals for specified conditions (such as medical and
educational expenses). Withdrawals are taxable as current

108

income to the recipient, and may be subject to a penalty
imposed by the plan.

Employee contributions (tables 102 to 104). Savings and
thrift plans allow employees to choose from a range of pos-
sible contribution rates. A plan, for example, might allow
maximum employee contributions anywhere from 6 to 16
percent of pay. One-fifth of participants could contribute
up to 16 percent of their earnings; 10, 12, and 15 percent
were other common maximums.

Salary reduction, after only a few years, has become a
dominant feature of savings and thrift plans. Ninety-two
percent of participants in savings and thrift plans were al-
lowed to make pretax contributions, up from 85 percent in
1988, 75 percent in 1986, and 65 percent in 1985.

The provisions governing pretax contributions vary
widely. For example, just over one-half of the participants
in plans allowing pretax contributions had an option to
make either pretax or posttax contributions, one-third
could make only pretax contributions, and the remainder
had to make at least some of their contributions on a pre-
tax basis. In 1989, 53 percent of participants had an initial
option to choose between pretax and posttax contribu-
tions, up by 50 percent over 1988. This reflects a greater
flexibility among savings programs, allowing employees to
adapt the plan to their needs.

The tax status of employee contributions is important
not only because of the current deferral of income taxes,
but because pretax contributions may not be withdrawn
from an employee’s account, except in limited circum-
stances, without severe tax penalties. Employees electing
to make posttax rather than pretax contributions, howev-
er, would avoid these tax penalties on withdrawals of their
contributions.

Employer matching contributions (table 105). Employers
provide an incentive for participation in'a savings and
thrift plan by matching all or a portion of the employee’s
contribution and adding this amount to the employee’s ac-
count. Usually the employer matches a portion of the em-
ployee’s contribution up to a specified percent of the em-
ployee’s earnings. For example, the most common
provision found'in 1989 was for an employer to match half
of the employee’s contribution up to the first 6 percent of
earnings. Assuming the employee contributed 8 percent of
earnings, the employer would add 3 percent (half of the
first 6 percent of the employee’s earnings) for a total con-
tribution of 11 percent to the employee’s account. In con-
trast with these straight percentage matches, nearly one-
fourth of the participants received matching contribution
rates varying by length of service, level of employee contri-
bution, or company profits.

Investment decisions (table 106). Nine out of ten partici-
pants in savings and thrift plans were allowed to choose
how they wanted their own contributions invested. Com-



Table 73. Life insurance: Percent of full-time participants

with accidental death and dismemberment benefits by

amount of coverage,’ medium and large firms, 1989

Table 74. Life insurance: Percent of full-time participants
with dependent coverage available, by type and amount of
coverage, medium and large firms, 1989

Protes- Profes-
sional | Techni- | Produc- sional | Techni- | Produc-
At par-|_ 2% | cal and | tion and At pare | 89d_| cal and | tion and
tem feigants |29inis-| clerical | service Type and amount of coverage | cipants | adminis: | clerical | service
trative | partici | partici- trative | partici- | partici-
partici- | pants | pants partici- | pants | pants
pants pants
Total yoo | 100 | 100 | 100
Total . 100 | 100 | 100 | 100
Death of spouse 400 | 100 | 100 | 100
Multiple of life insurance benefit a1 93 94 89 Flat benefit 65 62 59 69
Less than 1 times 7 8 4 7 Less than $1,000 .. 0) - = 1
1 times 82 81 86 80 $1,000 12 8 9 15
Greater than 1 times 3 4 3 2 $1,500 3 5 2 3
$2,000 "1 9 " 13
Flat amount 7 5 5 10 $2,500 4 3 2 6
Less than $5,000 .. 1 ° ro) 1 $3,000 3 3 2 3
$5,000-$9,999 3 2 2 8 $3,001 to $3,999 0) rv) 0 -
$10,000-$19,99: 1 1 1 2 34,06 1 1 1 1
$20,000-$29,999 1 1 1 1 $5,000 18 22. | 24 14
$30,000 or greater ... 1 1 ) 1 More than $5,000 12 " 40 13
Other’. 1 2 2 1 Benefit varies 34 7 40 30
By age of spouse .. “) 0 iV) ~
"Benefits shown are payable for accidental death and are the maxi- By employee opton M1 a | BED
raph pe tx gonenbemon. Efecto
2 Includes plans. in which basic life insurance benefits are expressed as Insurance coverage 3 4 6 1
4 flat dollar amount and accidental death and dismemberment benefits are
expressed as a muttiple of earings. Armount oF cagerage not 1 1 2 1
NOTE: Because of rounding, sums of individual items may not equal to- Insurance on §
s spouse not.
tals. Where applicable, dash indicates no employees in this category. provided = 0 © 0 0
Death of child 97 98 98 96
Flat benefit 57 58 55 56
Less than $1,000 .. 1 1 1 1
$1,000... 16 14 6 7
$1,001 to $1,499 ... iy) ° u) u)
$1,500 7 9 7 6
$2,000 1" 12 9 "1
$2,500 6 5 5 8
$3,000 2 3 3 1
$3,001 to $3,999 ... 0) 1 1 “
4.0 1 1 1 1
$5,000 ..... 8 " 9 6
More than $5,000 4 3 2 5
Benefit varies 40 39 4 39
By age of child? .. 13 W 1 16
By employee earnings .. iv) 1 iV) ()
By employee option .. 25 26 29 23
By amount of employee life
insurance coverage 0) 1 1 (v)
Amount of coverage not
determinable .. 1 1 1 1
Insurance on child not provided | 3 2 2 4

* Less than 0.5 percent.

2 Amount of insurance increases at some point after 1 year of age.

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

tals. Where applicable, dash indicates no employees in this category.

B



Table 94. Defined benefit pension plians:' Percent of full-time participants with provision for early receipt of deferred
vested benefits’ by comparison of reduction factors with early retirement, medium and large firms, 1989

ick Professional and Technical and clerical Production and service
AN participants administrative participants participants participants
Reduction for each year eduction factor for eduction factor for [Reduction factor for Reduction factor for
Prior to mormal retirement early retirement early retirement early retirement ‘early retirement
99 Total is Total ise Total ise Total is—
Same | Different Same | Different Same | Different Same | Different
Total 100 87 43 100 56 44 100 62 48 100 60 40
Uniform percentage” 34 25 9 J) 21 10 32 20 12 37 29 7
Less than 3.0 1 1 - 1 1 - 1 1 - fu) vl
5 3 2 6 3 3 4 2 2 4 4 ‘)
1 1 - 1 1 - iv) iv) = iy) i) ~
3 3] 0 4 4] 0 3 3] 0 3 3 | 0
3 1 2 2 1 2 6 1 6 2 2 oO
8 8 2 7 é 1 8 6 1 1 8 2
“ rm) - - - - - - - i) iv) -
“ 2 | el ge ol el of . 9 5 3
) ¢ ¢ > ¢ ) i) ¢ iv) iy) “)
3 3 iv) oO © iv) 1 1 iv) 5 5 1
1 0) 1 0) 1 1 0) 1 1 1 )
Percentage varies by age ...| 65 32 34 67 33 34 o7 32 35 63 30 32
Reduction differs for
each year of early
Tetirement’ .. 37 10 27 37 W 27 38 9 29 37 10 26
Reduction differs by ag
bracket® 28 22 6 30 23 7 23 23 6 26 20 6
Percentage varies by
service 1 1 - 1 1 - “ 1) - iv) 0 -
Other basis’ 0 - iy) iV) - iv) iv) - iv) “ - iv)

* Excludes supplemental pension plans.

? Receipt of benefits prior to normal retirement age for plan partici-
pants who terminated employment with vested rights to future benefits.

* In specific cases, uniform percentage reductions may approximate
actuarial reductions, such as early receipt of benefits at age 55 with a 6
percent a year reduction between age 65 and the plan's normal retire-
ment age of 62.

* Less than 0.5 percent.

* Reduction schedule is related to actuarial assumptions of the life
‘expectancy at age that pension payments begin.

® Rate of reduction is held constant within age brackets, but differs

among brackets, sometimes in approximation of an actuarial table. For
example, benefits may be reduced by 6.7 percent for each year between
age 60 and the plan’s normal retirement age, and by 83 percent for
each year retirement preceded age 60. Also includes some plans that
reduce benefits arithmetically for each year immediately below normal re-
tirement age and actuarially below a specified age, usually 55.

7 Reduced benefit was not derived from normal retirement formula.

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

104

i
i



Table 78. Defined benefit pension plans:' Percent of full-time participants in plans with percent of terminal earnings benefit
formulas by type and amount of formula, medium and large firms, 1989

Provision for Provision for
Provision for integration with Provision for integration with
maximum benefit? | Social Security maximum benefit® | Social Security
Type and amount of | 7, benefit Type and amount of benefit
2 ‘otal by Total
formuta’ Without formula’ Without
Subject | Not sub- |With inte-| “iTS Subject | Not sub- [with inte-| "UM
tomaxi-| jectio | grated | ey to maxi- | jectto | grated | sritey
mum |maximum| formula | Sree mum |maximum| formula | Sater
All participants [Technical and clerical
Total .. 100 100 100 100 100 Total 400 100 100 400 100
Fiat percent per year of Flat percent per year of
service .. 54 59 50 47 87 || service ..... | 8 60 40 5 89
Less than 1.00 4 6 2 } - Less than 1. . 2 2 2 yl -
4.00-1.24 . 8 6 10 1 - 4.00-1.24 6 6 6 i) -
1.25-1.49 7 1 14 6 - 8 9) 10 3 -
1.50-1.74 18 20 7 20 16 7 13 16 -
1.75-1.99 5 6 4 7 6 7 4 7 -
9 14 3 10 - t 7 4 12
2 3 rv) 2 - 3 8 V) 4
1 2 - 1 - 2 4 - 3 -
2.75 or greater ... iv) iv) “ c 0) - 2,75 or greater .. rv) iv) ) iv) -
Percent per year Percent per year
varies 46 4 50 83 13 || varies 40 59 54 1"
By service 16 16 7 17 - By service 19 19 19 20 -
By earnings .. 24 23 25 30 - By earings 25 19 33 29 -
By age 3 - 6 3 - By age . 2 - 5 3 -
By earnings and By earings and
service 3 2 3 3 - service . 2 1 3 2 -
Other’ .. iv) 0 iy) “ ~ — |[Other a ia) oO iv) -
Professional and Production and
administrative service
Total 100 100 100 100 100 Total .. 100 100 100 100 400
Flat percent per year of Flat percent per year of
service 53 58 49 a7 89 || service 58 59 56 48 84
Less than 1.00 1 1 1 0) ~ Less than 1.00 8 15 2 0)
6 6 6 iv) - 1.00-1.24 .. 12 7 16 1 -
6 1 10 4 - 1,25-1.49 .. 10 ia) 19 10 -
at at 22 2 - 1.50-1.74 .. 18 22 15 23 -
6 8 5 8 - 1.75-1.99 ... 4 4 4 6 -
10 16 4 om - 2.00-2.24 5 10 i) 6 -
2 3 0) 2 - 2.25-2.49 .. io) io) Q) 3) -
1 1 -* i - 2.50-2.74 .. 1 1 - 1 -
2.75 or greater v) 0 iv oO -
Percent per year
Percent per year VatiOS sree 42 4 44 52 16
varies | 47 42 51 53 1 By service 15 14 16 16 -
By service .. 15 14 15 16 - By earnings. 19 23 45 26 -
By earnings 28 26 3 33 - By age 4 - 8 5 -
By age 1 - 3 2 - By earnings and
By earnings and service seo 4 3 4 5 -
service . 2 2 2 3 -
lOther* .. i) oO i] O) ~
Other? V) - () 0 -
’ Excludes supplemental pension plans. * Includes formulas based on a flat percentage of carnings, some
? if a plan contained more than one terminal earnings formula, a pri- varying by length of service.
mary formula was selected and tabulated.
1 ‘These maximum provisions are independent of internal Revenue NOTE; Because of rounding, sums of individual items may not equal
Code ceilings on pensions payable from defined benefit plans. totals. Where applicable, dash indicates no employees in this category,
* Less than 0.5 percent. or data were insufficient to show further breakouts.

89



Table 49, Medical care benefits: Percent of full-time participants in plans with alcohol abuse treatment benefits by extent of

benefits, medium and large firms, 1989
ici Professional and adminis- | Technical and clerical | Production and service
All participants trative participants participants participants
Coverage limitation Inpatient] inpatient} Out- |inpatient|inpatient/ Out- |Inpatient| inpatient] Out- [inpatient|inpatient|  Out-
detoxif | rehabli-| patient | detoxifi- | rehabil-| patient | detoxif- | rehabili-| patient | detoxif- | rehabili-| patient
cation’ | tation? | care’ | cation’ | tation? | care? | cation' | tation? | care® | cation’ | tation? | care*
Total .. 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100
With coverage es | 61 | 100 | 68 | 62 | 10 | 64 | 61 | 100 70 | 61
Covered the same as other illnesses | 43 9 e | 44 9 71 47 1 a} 4 8 8
Covered the same as mental illness | (*) oO cv) a] ia) 1 “ iv) 1 ia QO “
‘Subject to separate limitations? .. ss | 59 | 53 | 55 | so | 54 |) 82 | s¢ | 52 | 59 | 61 52
Limit on days az | 46 | 22 | 41 4 | 2 | 37 | 4 | 19 | 45 | a | 29
Per year a7 | 31 20 | 28 | 34 | at 2 | 2 |} 18) 29 | 32 | 20
Per confinement 15 12 2 13 4 1 12 | 40 2 18 | 16 2
Per lifetime .. " 14 6 12 15 s | oi 13 4 12 | 14 8
Limit on dotlars 23 | 23 | 36 | 22 | 2 | 36 | 2 | 22 | a6 | 29 | 23 | a5
Per day iV) 1 6 9) 1 5 iy) v) 7 iy) i) 5
Per year 7 6 | 2 7 6 | 6 6 5 | 25 7 | 2
Per confinement (Vv) iv) - ) iy) - iv) ) = ) 9) ~
Per lifetime . 1 | | 1%) 19} 17 | 1 | at 18 | 20 1% | 17 | 417
Per other period 1 1 2 1 1 1 1 1 2 1 1 2
Coinsurance limit? 6 6 | 18 7 ? 18 7 6 | 18 6 5 18
Ceiling on out-of-pocket expenses:
does not apply 9 8 | 1 9 a | wl] ow 10 | at 8 7 | 7
Separate copayment or
deductible 1 1 6 1 1 8 1 1 7 1 1 4
Other limitations ... i) is) iy) “ 0 i) oO 0 iv) 0 9) is)
Without coverage 0) se | 3 | ¢ s2 | 3 | 3 | 39 | 30 | 30

* Detoxification is the systematic use of medication and other methods
under medical supervision to reduce or eliminate the effects of substance

buse.
* Rehabilitation is designed to alter abusive behavior in patients once

they are free of acute physical and mental complications.

* Includes treatment in one or more of the followi
ment of a hospital, residential treatment center, organized outpatient clinic,
day-night treatment center, or doctor's office. If benefits differed by loca-

tion of treatment, doctor's office care was tabulated.

ices.

‘Outpatient depart-

ST

“ Less than 0.5 percent.

* The total is less than the sum of the individual items because many
plans had more than one type of limitation.

* Coinsurance rate is lower than that applying to other medical serv-

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



Table 42.. Medical care benefits: Percent of full-time

Participants in plans with overall li

itations on benefits by

total annual deductible and maximum out-of-pocket expense,

Table 43.. Medical care benefits: Percent of full-time
participants in plans with overall limitations on benefits by
maximum benefit provisions, medium and large firms,

medium and large firms, 1989 1989
Protes- Protes-
sional | Techni- | Produc sional | Techni- | Produc-
and | cal and |tion and and | cal and | tion and
Dollar amount’ tapes |adminis-| clericat | service Type and dolar amount of | Al par | adminis clerical | service
pants |" trative | partici- | partici iP trative | partici- | partici-
partici- | pants | pants partici- | pants | pants
pants: Pants
Total... too | 100 | 100 | 100 Total 100 | 100 | 100 | 100
Plan specifies annual deductible and With maximum limits 79 76 78 81
‘out-of-pocket maximum 80 83 84 7
$100-$299 .. 1 is) 0) 1 Lifetime maximum only cal ra) 71 70
$300-8499 3 3 2 3 Less than $100,000 3 1 1 5
$500-$699 18 7 14 13 $100,000 1 1 2 1
$700-$899 5 6 5 3 $100,001-$249,999 1 1 (a) 1
$900-$1,099 4 "1 10 12 $250,000 6 7 5 5
$1,100-$1,299 22 20 24 22 $250,001-$499,999 3 2 1 4
$1,300-$1,499 4 4 2 4 $500,000 12 10 10 14
$1,500-$1,699 8 8 7 8 $500,001-$999,999 .. 3 4 3 3
$1,700-81,899 2 2 2 2 $1,000,000 40 43 46 35
$1,900-$2,099 2 2 3 3 More than $1,000, 2 3 3 1
$2,100 and greater 8 9 " 5
Based on earnings 2 1 2 2 Annual or disability maximum
OMY re se 2 1 2 2
Deductible not on an annual basis... 3 2 2 4
Both lifetime and annual or
Plan does not specify maximum disability maximums 6 4 5 8
annual out-of-pocket expense ... 17 14 14 19
Other maximum iv) @ @ ie)
* Total amount of deductible and out-of-pocket maximum is for each in- i _
sured person. In some plans, the individual and family deductibles are Without maximum limits .. a 24 22 19
identical.

? Less than 0.5 percent.

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

53

' Maximum described is for each insured person. Where the maximum
differed for employees and dependents, the employee maximum was tabu-

lated.
® Less than 0.5 percent.

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



Table 11. Paid vacations: Percent of full-time participants
by unused vacation policy, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and
adminis-| clerical | service
trative | partici- | partici-
partic | pants | pants

All par-

Policy ticipants

pants

Total joo | 100 | 100 | 100
Carryover only 24 33 33 15
Cash-in only 10 6 7 15
Carryover and cash 7 7 8 6
Unused benefit lost 86 50 51 63
Data not available 2 3 2 1

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

Table 12. Paid personal leave: Percent of full-time
employees by number of paid personal leave days
provided per year, medium and large firms, 1989

Table 13. Paid funeral leave: Percent of full-time
employees by number of paid funeral teave days available
per occurrence, medium and large firms, 1989

Profes-
sional | Techni- Produce
Allem-| 2nd jal and) ang
Number of days royees| 20min. | clerical | O00 |
Ployees istrative |employ- employ.
lemploy-; ees
ees ees
Total ... 100 | 100 | 100 | 100
Provided paid funeral leave .. 84 87 86 80
1 day . 1 1 1 1
2 days .. 3 3 4 2
3 days . e | 59] 58 | 66
4 days . 3 4 3 2
5 days .. eo] 13] 13 5
More thi YS en Ooo, oe 1
Varies by length of service 5 9 6 3
Number of days not available 0) 0) () 0)
Not provided paid funeral leave . 16} 19) 14} 20
Number of days varies by relation-
ship to deceased” 19} 19) 2) 18

* Less than 0.5 percent.
? The maximum number of days provided for any occurrence was in- +
cluded in the distribution of funeral leave days.

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

Table 14. Paid jury-duty leave: Percent of full-time
employees by number of paid jury-duty leave days
available per occurrence, medium and large firms, 1989

Protes- Protes-
sional Techni. | Produc: sional |Techri-|Produe-
and | cal and and eal and
Number of days svat | admin: | clerical | 2° Number of days Aiovaes| admin. | clerical} 0
ployees| istrative |employ- Snploy- Ployees istrative |employ-| sono
‘employ-| ees iploy- jemploy-| ees |°NPOY
ees ees ees
Total 100 | 100 | 100 | 100 Total 100 | 100 | 100 | 100
Provided paid personal leav 22) 28) 30) 14 Provided paid jury-duty leave so | | 92] a7
1 day 3| 3) 3) 2 Under 10 days 1 1 2} 4
2 days 5) 6| 8| 3 10 days 5} 5s] 5) 5
3 days a} 4] 5) 2 41-19 days 1 1 1 1
4 days a} 3] 4) 2 20 days 2) 21 4 2
5 days 2] 3] 3 1 21-29 days 1 4 aa)
More than 5 days 4 2) 2) 4 20 days 1 2) 4
No maximum specified’ 3] 6] 3] 4 More thar Oo} o} 1
Varies by length of service 2) 4 3] 4 No maximum specific a | a2] 75
Number of days not available ) -| -]o Number of days not available... ¢) | () | | @
Not provided paid personal leave ...| 78 | 72 | 70 | 86 Not provided paid jury-duty leave .. wo} s}| 6] 13

' Persona! leave is provided as needed.
® Less than 0.5 percent.

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

* Less than 0.5 percent.
? Jury-duty leave is provided as needed.

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



plans covering 12 percent of participants). In general, fee-
for~service plans and preferred provider organizations
were more likely to include all types of cost containment
features than were HMO’s, which have their own inherent
cost containment mechanisms.

Other health benefits

The survey measured the incidence of several other ser-
vices provided through medical care plans (table 53). For
example, 28 percent of medical care participants were in
plans that covered at least some of the costs for routine
physical examinations and 26 percent had at least partial
coverage for organ transplants. HMO’s nearly always in-
cluded coverage for hearing care, physical examinations,
well—baby care, and immunizations and inoculations. The
main reason for such a high incidence of these services is
that HMO’s are required to include these benefits to qualify
under the Health Maintenance Organization Act of 1973,
as amended.?°

Vision care

Vision care coverage was available to 35 percent of ali
medical care plan participants (table 54). Nearly all par-
ticipants eligible for vision benefits had coverage for eye
examinations, 68 percent had coverage for eyeglasses, and
66 percent had coverage for contact lenses. Blue—collar
participants were more likely than white-collar partici-
pants to receive benefits for eyeglasses and contact lenses.

Separate limits for vision care included scheduled dollar
allowances, coinsurance, copayments, and discounts on
the purchase of eyeglasses and contact lenses. The major-
ity of vision care participants had coverage subject to sepa-
rate limitations only: 65 percent of all participants with
coverage for eye exams, 85 percent for eyeglasses, and 91
percent for contact lenses. Nearly one-third of those cov-
ered for eye exams were covered in full, and 5 percent had
coverage subject to overall limits only (such as deduc-
tibles, coinsurance, and maximums that applied to all care
received). Common benefits included a schedule payable
by the plan for eyewear and a copayment for eye examina-
tions.?!

Employee contributions

The percent of employees whose medical care: pre-
miums were wholly paid by their employers declined
slightly in 1989. Forty~eight percent of workers had indi-
vidual coverage wholly financed by their employers in
1989, down from 51 percent in 1988. Thirty-one percent
received fully paid family coverage, virtually unchanged

20 Under the Health Maintenance Organization Act of 1973, as
amended, an HMO must provide certain coverage, such as home health
care, physical examinations, and children’s eye and ear examinations.

Under certain circumstances, employers may be required to offer em-
ployees medical care coverage through Federally qualified HMOs.

2 Vision care benefits are discussed in detail in Rita S. Jain, “Em-
ployer-sponsored Vision Care Brought Into Focus,” Monthly Labor
Review, September 1988, pp. 19-23.

from 1988 but a 4-percentage-point drop from 1986. This
continued a long-term decline in fully paid medical care
coverage, which is partly a reaction to the increased cost of
medical care (tables 55 to 57).

Exact data on the amount of an employee’s contribu-
tions for medical benefits occasionally were not available
because a single payroll deduction applied to both medical
care and one or more other benefits. However, where the
amount was reported, employee premiums for individual
and family coverage averaged $25 and $72 a month, re-
spectively, up from $19 and $60 in 1988. Employee pre-
miums for single coverage were slightly higher for produc-
tion and service workers than for the two white-collar
groups, while the opposite was true for family coverage
premiums.

Of those participants required to contribute, 12 percent
were in plans where the contribution varied depending
upon the choices made by an employee under a flexible
benefits plan or reimbursement account, up from 3 per-
cent in 1988. Such provisions, which mirror the growth in
flexible arrangements discussed in chapter 9, were more
common among white-collar workers than among blue-
collar workers.

Employee medical care premiums showed some varia-
tion by type of plan. Fifty-nine percent of participants in
HMO’s were required to contribute for single coverage and
73 percent for family coverage, compared to 45 and 64 per-
cent, respectively, for non-HMO’s. The average premium
for individual coverage was higher for participants in non—
HMO’s; the opposite was true for family coverage.

Of employees required to contribute toward the cost of
their medical care coverage in 1989, 25 percent were al-
lowed to do so with pretax dollars, up from 16 percent in
1988. These employees had the advantage of reducing
their taxable income while buying medical care. Pretax
contributions may be required or optional, and are often
offered as part of a flexible benefits arrangement.

Participation requirements

Health care plans typically required that only a short
eligibility period, if any, be served by new employees be-
fore coverage began (table 58). A little over two-fifths of
health care plan participants were allowed to join a plan
immediately upon being hired. For participants required
to complete a minimum length of service, the required pe-
riod was usually 3 months, while 1-or 2-month require-
ments also were common. The incidence of service re-
quirements varied widely among white-and blue-collar
workers: Forty-eight percent of white-collar employees
could participate immediately, as opposed to 34 percent of
blue-collar workers. For 9 percent of participants, the ser-
vice requirement was not determinable, usually because
plan documents (typically prepared by a health coverage
provider) did not include the employer’s eligibility provi-
sions.



Table 37. Health care benefits: Percent of full-time participants by coverage for selected categories of care, medium and

large firms, 1989

Care provided
Category of medical care Total Subject to | Subject to | Subject to | Care not, pro-
All Covered in full| internal limits | overall mits | internal ang | ded
only? only? overall limits
All participants
Hospital room and board . 400 98 19 4 42 34 2
Hospitalization—miscellaneous
services* 100 98 19 4 42 34 2
Extended care facility’ .. 100 80 7 20 14 40 20
Home health care* 400 75 20 8 7 28 25
Inpatient surgery . 400 98 33 1 56 9 2
Outpatient surgery’ 100 98 38 0) 51 9 2
Physician visits—in hospital 100 98 23 1 58 7 2
Physician visits—oftice .. 100 97 9 14 a 6 3
Diagnostic X-ray and laboratory . 100 98 28 W) 58 2 2
Prescription drugs—nonhospital 100 95 3 20 60 3 5
Private duty nursing 100 86 16 1 62 8 4
400 97 () 21 1 75 3
100 96 3 20 7 66 4
400 92 0 21 2 68 8
100 35 8 28 1 2 65
100 97 1 16 19 60 3
Drug abuse treatment 400 96 1 15 20 60 4
Hospice 100 42 9 7 18 13 58
Professional and administrative
Hospital room and board 100 98 24 2 43 29 2.
Hospitalization—miscellaneous
services* 100 98 24 2 43 20 2
Extended care facility . 400 81 9 20 13 39 19
Home health care® 100 80 24 9 15 32 20
Inpatient surgery 100 98 34 i 87 7 2
Outpatient surgery” 100 98 40 0) 52 6 2
Physician visits—in hospital 100 98 26 0) 60 " 2
Physician visits—otfice 100 98 40 15 69 8 2
Diagnostic X-ray and laboratory 100 98 3t (0) 59 8 2
Prescription drugs—nonhospital 100 96 3 31 59 3 4
Private duty nursing .. 100 88 20 1 59 8 2
Mental health care 100 98 a) 24 1 73 2
In hospitat . 100 97 4 22 9 6t 3
Outpatient « 100 96 1 24 2 70 4
Vision 100 36 6 27 1 2 64
Alcohol abuse treatment .. 100 97 2 16 7 61 3
Drug abuse treatment 100 97 2 16 19 60 3
Hospice 100 49 10 10 15 18 81

See footnotes at end of table.

48

|
|



Table 71. Life Insurance: Average benefit amounts’ for full-time participants by specified annual earnings and years of
service, medium and large firms, 1989

Annual salary

Years of service
$15,000 $20,000 $25,000 $35,000 $45,000 $55,000

All participants
5 years $20,266 $26,223 $31,684 $41,332 $50,156 $58,481
10 years 20,439 26,396 31,858 41,505 50,330 58,655
20 years 20,539 26,496 31,957 41,605 50,429 58,754

Professional and

administrative
5 years 22,402 29,602 36,484 48,085 58,688 69,616
10 years 22,755 29,955 36,897 48,418 59,041 69,969
20 years 22,962 30,162 37,044 48,625 59,247 70,175

Technical and clerical
5 years 21,476 28,375 94,531 45,634 56,340 66,122
10 years 21,648 28,546 34,702 45,806 56,511 66,203,
20 years 21,743 28,641 34,797 46,901 56,606 66,388
Production and service

18,360 23,085 27,387 35,072 41,844 47,856
18,427 23,151 27,403 95,139 41,910 47,923
18,465 23,189 27,441 35,177 41,948 47,961

* Life insurance figures are average amounts from all types of plans prior to any age-related reductions in benefits.

Table 72. Life insurance: Percent of full-time participants
by provisions for age-related reduction of basic life
insurance benefits for current employees, medium and large
firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and
adminis-| clerical | service
trative | partici | partici.
partici. | pants | pants
pants

All par-

Provision tleipants

Total 100 100 j} 100

Life insurance changes ... 52 57 57 a7

Life insurance reduced 52 87 57 47

Reduction begins

Age 60 or before . 1 2 1
Ages 61 to 64 iv) iv) 0 ()
Age 65 29 33 32 26
Ages 66 to 69 3 3 3 3
Age 70 18 18 20 16
Age 71 or later 1 1 1 1
Reduction in maximum life
insurance benefits 0) iV) () ()
Life insurance benefits do not
change . 48 a3 43 53

" Less than 0.5 percent.

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

77



Table A-2. Standard errors for table 6 -- Paid holidays and
vacations: Average number of days for full-time
participants, medium and large firms, 1989

cores 4 | Technical | Production
All par- al and and
tem ticipants |@4TMWNIS | erical | service
artereants|P2"cipants participants
Paid holidays .. 0.09 0.06 0.12 0.13
Paid vacation by length of
service:
At 6 months 09 08 mM 46
At 1 year .. 13 4 16 4
At 3 years 08 14 12 06
At 5 years a 2 ‘20 10
At 10 years .. 12 AW 19 12
At 15 years .. 4 16 19 17
At 20 years .. 16 AZ 22 20
At 25 years he ‘20 26 ‘21
At 30 years .. 20 21 30 24

Table A-3. Standard errors for table 22 -- Paid sick leave:
Average number of days at full pay for full-time participants
by type of plan, medium and large firms, 1989

SOteS | Technical | Production
Nem All Par | administra-| 2nd and
ticipants |@TMIS2| clerical | service
participants Paticipants participants
Paid annual sick leave by

length of servi
At 6 months .. Vt 1.3 12 08
At t year 14 14 12 8
At years 441 14 12 ‘2
AL 5 years 42 14 43 12
At 10 years 14 V7 14 16
At 18 years 15 17 16 17
At 20 years 15 18 47 18
At 25 years 16 18 47 18
At 30 years 16 1 17 18

Paid per disability sick

leave by length of

service:
At 6 months 49 BA 47 62
AUT year 36 44 35 58
At years 33 36 34 5A
AL5 years 33 38 35 52
AL 10 years 32 35 37 47
AL 15 years. 33 33 42 43
‘At 20 years... 36 34 48 55
‘At 25 years 44 35 56 77
At 30 years . 44 35 55 77

132



Table 3. Work schedule:

Percent of full-time employees by

number of hours scheduled per week,’ medium and large

firms, 1989
Profes-

sional | Techni- | Produc-

Allem-|_ 2nd _ | cal and | tion and

Work schedule Tovess |#0minis-| clerical | service

Ploy@es | ‘trative | employ- | employ-
employ-| ees | ees

ees
Total 100 | 100 | 100
Hours per week:

Under 30 19) a) = iy)
30 19) @ 9) 1
‘Over 30 and under 35 6. to) is) ® i)
35 3 6 4 1
‘Over 35 and under 97. 1 2 31 @
37.5 7 9 13 3
Over 37.5 and under 40 1 2 2/ @
40 82 78 7 88
Over 2 1 1 4
50 and over .. a) 1 ) 1
Hours per week not available 1 ro) ) i
Non-fixed work hours... 1 1 1 1

* Work schedule data include regularly scheduled overtime, paid. lunch,

and paid rest periods.
? Less than 0.5 percent.

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

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

1989
Profes-
sional | Techni- | Produc-
‘Alem. | 2d | cal and | tion and
Minutes per day Tovey |adminis-| clerical | service
Ploy trative | employ- | employ-
empioy-| ees | ees
ees
Total ... 100 | 100 | 100 | 100
Provided paid lunch time 10 4 4 16
Under 20 minutes 1 “ 1) 2
20 minutes .... 4] ¢ 0) 8
Over 20 and under 30 minutes.) (‘) - 0) 0)
30 minutes .... 4 2 3 5
‘Over 30 minutes 1 1 1 1
Number of minutes not
available 0 cv) 19) 0
Not provided paid lunch time .. 90 96 96 84

* Less than 0.5 percent.

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

tals. Where applicable, dash indicates no employees in this category.

10



Table A-5. Standard errors for table 24 -- Paid annual sick
leave: Average number of days at full pay for full-time
Participants by sickness and a‘ jent insurance
coordination, medium and large firms, 1989 '
Profes- || Technical | Production
i All par- | Sional and | "and and i
fem ticipants |P°NNE""| clerical | service H
participants Participants participants
At year of service:
With sickness and
accident insurance...) 0.3 04 03 04
Without sickness and
accident insurance...) 1.5 19 16 12
At 5 years of service:
With sickness and
accident insurance ... 7 18 8 6
Without sickness and
accident insurance...) 1.5 at 15 19
At 10 years of service:
With sickness and
accident insurance... 1.1 23 1 2
Without sickness and Hy
accident insurance... 1.8 25 18 27 i
AU 15 years of service: |
With sickness and i
accident insurance...) 1.3 27 1.2 1.0 i
Without sickness and
accident insurance...) 1.9 25 19 3.0
At 20 years of service: |
With sickness and
accident insurance...) 1.5 31 13 1
Without sickness and j
accident insurance...| 2.0 26 20 3.1 H
At 25 years of service:
With sickness and j
accident insurance...) 1.7 33 1.4 13 H
Without sickness and |
accident insurance...) 2.1 26 a4 3.2 |

Table A-6. Standard errors for table 57 Medical care

benefits: Average monthly contribution of full-time

participants in contributory plans, medium and large firms,
9

198!
Protes- | Technical | Production
Aitpar- | Sonal and | "9ST uc
Type of coverage ticipants adminisva- cn sae
parteipants|attcipants participants

All plans

Employee coverage .. $1.83 $0.96 $2.10 $2.19

Family coverage 2.78 2.95 372 3.40
Health maintenance

‘organizations i
Employee coverage .. 1.68 4,08 2.06 2.04
Family coverage ... 485 3.53 5.76 6.08

Non-health

maintenance

organizations
Employee coverage 2.08 4.15 2.23 2.51
Family coverage .. 2.84 3.55 4.00 3.49

134



Table 40. Medical care benefits: Percent of full-time
participants in plans with overall limitations on benefits by
coinsurance rate, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and

Coinsurance amount ems adminis-| clerical | service
trative | partici- | partici-
partic | pants | pants
pants:

Total .... 100 100 100 | 100

With coinsurance’ ... 97 96 97 98

Coinsurance rate”

80 percent 79 78 7 8i
85 percent 4 5 3 5
90 percent 8 9 12 7
Other percent . 3 3 4 3
Varies? .. 1 1 1 2
Without coinsurance* 3 4 3 2

' Represents the initial coinsurance in plans that have 100 percent cov-
erage after the individual pays a specified dollar amount toward expenses.
For example, the plan pays 80 percent until the individual's out-of-pocket
‘expense reaches $1000, and then coverage is at 100 percent.

* Includes plans that have more than one coinsurance rate. In these
‘cases, the coinsurance rate shown is that which applies to the majority of
benefits under the plan. Also includes plans where some benefits have a
coinsurance rate while other benefits are not subject to a coinsurance
rate. In these cases, the tabulation included the benefits with a coinsur-
ance rate,

3 The overall coinsurance rate varies by specified dollar amount of ex-
penses. For example 80 percent coverage up to $5000 and 90 percent
thereafter.

+ Includes plans with overall benefit limitations, such as maximum dollar
amounts and deductibles, where the coinsurance rate is 100 percent.

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

52

Table 41. Medical care benefits: Percent of full-time
participants in plans with overall limitations on benefits by
maximum out-of-pocket expense provisions, medium and
large firms, 1989

Profes-
sional | Techni- | Produc-
; All par- |_and._| eal and | tion and
Provision eipants |20minis-| clerical | service
trative | partici- | partici-
partici | pants | pants
pants
Total .. 100 | 100 | 100 | 100
Maximum on annual out-ot-pocket
‘expense’ 83 86 88 8t
Per individual:
1 1 1 i
2 13 12 "
2 4 1 12
12 12 1 1
$1,000-$1,249 25 23 27 25
$1,250-$1,499 7 7 6 8
$1,500-$1,999 6 6 6 6
$2,000-$2,499 5 4 7 4
$2,500 and greater 4 5 4 3
Per family?
$1-8499 2 1 2 2
$500-874 2 2 2 2
$750-8999 4 5 3 3
$1,000-$1,249, 6 8 6 5
$1,250-$1,499 1 2 1 1
$1,500-$1,999 7 8 8 6
$2,000-82, 14 18 14 18
$3,000-83,999 9 7 10 10
$4,000 and greater ... 4 6 5 3
No family maximum .. 34 32 35 36
Coinsurance varies by procedure? 1 1 1 1
No maximum on annual out-ot-
pocket expenses . 16 13 13 18
Coinsurance unchanged | 16 13 13 18
Final coinsurance changes to
other than 100 percent ... ie) iv) ie) iv)

* Deductible amounts were excluded from computation of the out-of
pocket dollar limits. With rare exceptions, an annual out-of-pocket limit
was specified, Few workers were in plans where the expense limit applied
to a disability or a period other than a year. Charges tor certain services,
such as mental health care, may not be counted toward the out-of-pocket
maximum.

® In a few plans family out-of-pocket expense could not be computed
because no limit on family deductibles was given.

> Different coinsurance rates apply to different categories of care, but
covered expenses under all coinsurance rates are limited to a specific dol-
lar amount after which the plan pays 100 percent of additional expenses.
Due to the varying coinsurance rates, out-of-pocket maximums cannot be
calculated.

*" Less than 0.5 percent.

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

i
|
1
|
|
1
|



Contents—Continued

Page
48. Mental health benefits by extent of benefits 56
49. Alcohol abuse treatment benefits by extent of benefits .. S7
50. Drug abuse treatment benefits by extent of benefits 58
51. Health maintenance organization features . 59
52. Selected cost containment features . 60
53. Coverage for selected special benefits . 61
54. Vision benefits by extent of benefits .... 62
55. Contributory plans by type and amount of employee contribution 63
56. Contributory status by type of funding arrangement ............ 65
57. Average monthly contribution for employee and family coverage . 65
58. Length-of-service requirements for participation . . 66
59. Employer-financed coverage after retirement 66
60. Employer-financed coverage after retirement by benefit provisions and age of retiree . 67
61. Employer-financed coverage during a layoff 68
Dental care:
62. Dental benefits by extent of coverage for selected procedures ... 69
63. Dental benefits by deductible provision 71
64. Dental benefits by yearly maximum amount of insurance 7
65. Orthodontic benefits by lifetime maximum amount of coverage . 72
66. Dental preauthorization requirements s 72
67. Contributory stand-alone dental plans by type and amount of employee contribution ............ 73
Life insurance:
68. Method of determining amount of basic life insurance and frequency of related coverages ........ 714
69. Multiple-of-earnings formulas by amount of basic insurance and maximum coverage provisions .. 75
70. Flat dollar formulas by amount of basic insurance . .. 76
7i. Average benefit amounts ...........6.0eeeeeeeeee 77
72. Age-related reductions for active older workers ... 7
73. Accidental death and dismemberment benefits 78

74, Dependent life insurance coverage ...........- 8

75. Effect of retirement on basic coverage .......... 79
76. Length—of-service requirements for participation .. 79
Defined benefit pension plans:
77. Method of determining retirement payments ...... 88
78. Terminal earnings benefit formulas by type and amount of formula . 89
79. Terminal earnings formulas by definition of terminal earnings . . 90
80. Earnings-based formulas by definition of earnings ... 91
81. Career earnings benefit formulas by type and amount of formula . 92
82. Dollar amount benefit formulas by type and amount of formula .. 93
83. Provision for integration of pension with Social Security benefit .. 94
84. Maximum benefit provisions 95
85. Average replacement rates .. 96
86. Minimum age and associated service requirements for normal retirement ... 98

87. Minimum age and associated service requirements for early retirement ...
88. Early retirement by reduction factor for immediate start of payments .
89. Provisions for disability retirement ............600 see eee errr etree
90. Provision for postponed retirement .......-....
91. Incidence of ad hoc postretirement increases .
92. Provisions of ad hoc postretirement increases . ..
93. Vesting schedules ...........0-02 eee ee reece



Table 62. Dental care benefits: Percent of full-time participants by extent of coverage for selected procedures, medium and

large firms, 1989

Type of dental procedure

Extent of coverage . C ; i -
Examina pene | Filings cunent Inlays | Crowns |Porodontall Encoder: | prosthetics | Orthodon
All participants
Totar .. 100 100 100 400 100 100 100 100 100 100
‘Scheduled cash allowance n "1 15 18 14 45 14 15 14 0)
Incentive schedule” 1 1 1 1 ty) “) 1 1 ro) -
Subject to copayment® 2 1 2 3 3 4 3 3 4 3
Percent of usual, customary, and
reasonable charg 86 87 at 79 75 76 7 79 7 63
_ - - - a) o) - - QO oO
2 7 50 51 10 8 60 49
- - - - iv) iv) - - iy) oO
i) ) 1 1 5 5 1 1 5 1
1 2 4 3 3 3 4 3 2 1
1 1 6 6 2 2 6 6 1 1
20 22 46 46 7 7 43 45 5 1
0) 3 5 4 3 2 5 5 0) -
4 4 4 4 3 3 4 4 [¥) o
58 54 9 9 3 3 6 7 2 9
“) (9) i) iv) “ oO 0 iv] i) Oo
O vy) 1 1 1 1 1 1 1 -
to) to) 1 1 6 4 4 2 5 34
Not determinable - - - - to) - - - - ~
Professional and administrative
Tota? 100 100 100 100 100 100 400 100 100 100
‘Scheduled cash allowance of n 16 15 15 15 14 15 15 -
Incentive schedule” 1 1 1 1 iy) iv] 1 1 “) -
Subject to copaymer 2 1 2 3 3 4 4 3 4 4
Percent of usual, customary, ai
feasonable charge 85 86 80 73 76 7 78 76 64
Less than 50 - - - - Q - - Yo iv)
50 2 2 8 8 53 "1 9 59 49
51-59 - - - - 0) 0) - - “ 0)
oO “ 1 1 6 6 1 1 5 2
61-74 2 2 4 4 3 3 4 4 2 1
75 1 1 5 5 2 2 5 5 1 1
80 18 19 49 49 7 7 46 48 6 2
85 is) 2 3 3 1 1 3 3 9) -
90 3 3 2 2 1 1 2 2 te) “
100’ 60 56 9 8 3 3 6 6 2 10
Discounted benefit’ oO Yo 1 oO 1 1 1 “ “ }
Subject to overall plan provisions
conly® iv) QO QO () oO oO 0 iy) iv) ~
Not covered .. 1 1 1 1 6 1 32
Not determinable - - - - ) - - - - ~

See footnotes at end of table.



Table 21. Paid sick leave: Percent of full-time employees by sick leave provision, medium and large firms, 1989

|
i
Profes- Profes- i
sional | Techni- | Produo- sional | Techni-| Produc- |
‘Alem, | 294 | cal and | tion and Altem- | 290 | cal and | tion and |
Sick leave policy’ Tovens |20minis-| clerical | service Sick leave policy’ ovens (adminis) clerical | service |
Ploys trative | employ- | employ- Ployees | ‘ative | employ- | employ- |
employ-| ees ees employ-| ees ees |
ees ees H
Total 400 | 100 | 100 |
At 40 years of i
Provided paid sick leave? 68 93 87 44 service—Continued
15 and under 30 days . 4 7 5 2
Sick leave provided 30 and under 60 days 2 3 2 2 |
annual | 56 70 74 39 60 and under 120 days 3 6 4 1
120 and under 180 days 4 9 5 1
At 6 months of service: 180 days or more .. 1 1 0 )
Under 5 days .. 14 12 18 13
5 and under 10 days 23 3t 37 4 At 15 years of servic j
10 and under 15 days . 4 8 6 2 Under 5 days 2 1 1 3
15 and under 30 days .. 2 5 2 1 5 and under 10 days .. 22 18 27 22 |
80 and under 60 days .. 0 1 iv) () 18 24 29 8 |
60 and under 120 days 1 2 0) 0) 4 8 5 2 |
120 and under 180 days... 2 4 2) 2 2 2 1 i
180 days or more .. ie) } iv) - 60’and under 120 days 3 7 4 1 i
120 and under 180 days 4 9 8 1 i
‘At year of servi 180 days or more 1 2 1 0
Under 5 days 5 2 3 7
5 and under 10 days 22 20 at 19 At 20 years of service:
10 and under 15 days .. 19 28 30 9 Under 5 days 2 1 1 3 |
15 and under 30 days... 5 10 6 2 5 and under 10 days . 22 18 27 2
30 and under 60 days .. 1 2 1 ) 40 and under 15 days. 18 24 29 8
60 and under 120 days 1 2 1 1) 15 and under 30 days 4 8 5 2
120 and under 180 days..| 2 4 3 0) 30 and under 60 days 2 2 2 1 |
180 days or more oO 1) 0 is) 60 and under 120 days 3 6 4 1 |
120 and under 180 days 4 9 5 1
At 5 years of service: 180 days or more ... 1 2 1 “0
Under 5 days .. 2 1 1 4
5 and under 10 days 22 18 27 21 At 25 years of service:
10 and under 15 days . 18 24 29 9 Under 5 days ... 2 1 4 2
15 and under 30 days 5 8 6 2 5 and under 10 days... 22 18 27 22
30 and under 60 days .. 3 6 4 2 10 and under 15 days .. 18 24 23 8 |
60 and under 120 days 3 6 3 “0 15 and under 30 days 4 8 5 2
120 and under 180-days../ 3 5 3 1 30 and under 60 days 2 2 2 1 |
180 days or more . 0) 1 ro) ) 60 and under 120 days 2 5 3 1 |
120 and under 180 days 5 10 6 i
‘At 10 years of 180 days or more . 1 2 1 i)
service:
Under 5 days. 2 1 1 4
5 and under 10 days 22 18 a7 a
10 and under 15 days .. 18 24 29 8

See footnotes at end of table.

24



Table 60. Medical care benefits’: Percent of full-time participants by provisions for benefits after retirement, medium and

large firms, 1989

ick Professional and Technical and clerical Production and service
All participants administrative participants participants participants
Characteristic
Retiree under| Retiree 65 |Retiree under Retiree 65 |Retiree under} Retiree 65 |Retiree under| Retiree 65
65% and over 65" and over * and over sr and over
Percent of participants with
employer-financed retiree
coverage® at 36 45 44 39 a7 39 33
Benetit level‘

Total . 100 100 400 100 400 100 100 100
No change in coverage 79 72 84 76 82 76 75 67
Reduced coverage 15 at 11 17 11 16 20 26
increased coverage io) 1 7) 1 ) 1 a) 1
Not determinable 6 6 5 5 6 7 5 6

Eligibility for retiree coverage
100 400 100 100 100 100 400 100
39 37 41 40 4 40 37 34
lity subject to service

requirement .. 29 26 28 26 31 29 28 25
Must qualify for company

i 28 30 24 28 at 24 29 34

1 1 1 1 2 2 1 1

Eligibility data not avaiable 6 6 5 5 5 6 6 7
Financing

Total 100 100 100 100 100 100 100 400
Retiree pays some cos! 52 50 56 55 57 55 46 44
Retiree pays no cost 45 47 at 42 40 42 50 52
Not determinable ... 3 3 2 3 3 3 3 4

‘ Plans providing services or payments for services rendered in the

hospital or by a physician. Excludes plans that provided only dental, vi-

sion, of prescription drug coverage.

® "Provisions in this column apply to the period between retirement and

age 65.

® Tabulations cover plans in which insurance was continued for longer
than 1 month after retirement and where the employer wholly or partly fi-

nanced the coverage. It excludes plans that provide only the retirae’s

67

© Less than 0.5 percent,

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

share of premiums for medical insurance under Medicare (Part B).

“ For ratirees eligible for Medicare, benefits may be calculated and re-
duced by the extent to which covered expenses are reimbursed by the
Federal program.



Table 52. Medical care benefits: Percent of full-time participants by coverage with selected cost containment features,

medium and large firms, 1989

Profes- Profes-
sional | Techni- | Produc- sional | Techni- | Produc-
; All par- |_274_| cal and | tion andl Allpar- | and_| cal and | tion and
Cost containment feature ticipants adminis-| clerical’| service Cost containment feature ticipants adminis-| clerical | service
m trative | partici- | partici- pants | trative | partici- | partici-
partici | pants | pants partic: | pants | pants
pants Pants
All medical plans'
Fee-for-service plans—Continued
Higher rate of payment for generic
prescription drugs .. | 14 15 18 42. ||Incentive for prehospitalization
testing 49 50 53 47
Higher rate of payment for mail
order drugs .. 10 9 10 10 |/Prehospital admission certification
requirement 50 53 St 49
No or limited reimbursement for
nonemergency weekend lHigher rate of payment for delivery
admission to hospital 12 ah abl 13 at birthing center 22 28 26 18
Separate deductible for hospital incentive to audit hospital statement 7 9 8 6
admission ... 10 9 a) 9
[Care subject to utilization review 27 29 31 25
Incentive for prehospitalization
testing ... 42 a 44 41 |lHealth maintenance organizations
Prehospital admission certification Higher rate of payment for generic
requirement 44 44 42 45. || prescription drugs .. 9 10 12 5
Higher rate of payment for delivery Higher rate of payment for mail
at birthing center 20 22 23 16 || order drugs... 6 5 10 4
Incentive to audit hospital statement 5 6 6 5 |\Separate deductible for hospital
admission .. 5 6 5 4
Care subject to utilization review 23 24 24 23
Incentive for prehospitalization
Fee-for-service plans testing 4 5 5 3
Higher rate of payment for generic Prehospital admission certification
prescription drugs .. 15 16 15 14. |] requirement 5 5 8 3
Higher rate of payment for mail [Higher rate of payment for delivery
order drugs .. 10 10 8 10 at birthing center 2 3 2 2
No or limited reimbursement for \Care subject to utilization review 2 2 2 2
nonemergency weekend
admission to hospital 14 15 14 14
‘Separate deductible for hospital
admission 10 10 10 10

* Data were insufficient to show preferred provider and exclusive pro-

vider organizations separately.

NOTE: Where applicable, dash indicates no employees in this cate-

gory.

60



Table 17. Unpaid parental ieave': Percent of eligible full-time
employees by maximum duration of benefits, medium and large firms,
1989

eos | Technical | Production
Duration All eligible | S10771.8P4| and and
employees} Shing | Clerical | service
employees employees | employees

Unpaid maternity teave

Total .. 100 100 100 100
Under 6 weeks .. 2 1 1 2
6 WEEKS an. 15 12 13 18
Over 6 and under 8 weeks i) = is)
8 wooks 4 5 2 5
Over 8 and under 13 weeks 9 7 9 TT
13 weeks ...... 15 18 19 W
Over 13 and under 26 weeks 19 18 19 21
26 weeks .. 20 19 22 19
Over 26 and under 52 weeks ... 5 6 6 3
52 weeks "1 8B 10 10
Over 52 weeks .. co) - - is)

Unpaid paternity leave

Total 100 100 100 100
Under 6 weeks .. 3 5 2 3
6 weeks at 7 a 24
8 weeks 3 3 2 4
‘Over 8 and under 13 weeks . 8 8 " 7
13 weeks 15 18 15 14
Over 13 and under 26 weeks 14 14 10 15
26 weeks... ai 7 24 24
Over 26 and under 52 weeks 3 3 4 2
52 weeks ... " 16 12 7

* This table includes plans providing a fixed number of unpaid days off, regardiess
of whether paid days off are atso provided.
® Less than 0.5 percent.

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



Table 29. Long-term disability insurance: Percent of full-time participants by method of determining payment, medium and

large firms, 1989

With maximum

Type of maximum provision

Without maximum

Method Total coverage Plan maximum | Disability income |Plan and disability) coverage
only" maximum only’ | income maximum
All participants
All methods .. 100 83 a 5 28 7
Fixed percent of earings .. 86 75 37 12 26 "1
Less than 80 percent 1 1 1 0) () 0
50 percent 20 18 5 7 6 2
60 percent 46 40 at 4 15 6
65 or 67 percent 13 12 9 1 3 1
70 percent or more 4 3 1 io) 2 1
Other percent . 1 1 a) - 1 o)
Percent varies by earnings 5 3 1 ) 1 1
Percent varies by service . 3 2 2 ) Q °
Scheduled dollar amount varies by
eamings .. 5 is) cv) - - 4
Other! 3 3 ) 2 eo -
Professional and administrative
All methods 100 86 45 12 29 14
Fixed percent of earings 90 78 42 9 28 12
Less than 50 percent 1 1 is) 0, i) i)
50 percent .. 7 13 5 3 5 4
60 percent . 51 45 24 4 7 6
65 or 67 percent 15 14 1 1 3 1
70 percent or more .. 4 4 1 iV) 2 1
Other percent 1 1 ) - 1 a)
Percent varies by earnings. 5 4 2 0 1 2
Percent varies by service .. 2 2 1 1 i) Vv)
Scheduled dollar amount varies by
earnings .. ) a) i) - - i)
Other 3 3 ) 3 - -
Technical and clerical
All methods ..... 100 88 40 7 31 12
Fixed percent of earnings 93 83 37 15 3t 10
Less than 50 percent .. 1 1 1 (a) iv) iv)
50 percent .. 23 at 5 9 8 1
60 percent . 48 42 20 5 7 7
65 or 67 percent .. 15 14 "1 1 2 1
70 percent or more 5 4 1 e) 3 1
Other percent 1 1 9) - 1 i)
Percent varies by earnings 3 2 1 iv) 1 1
Percent varies by service 1 1 1 iv) i) (eo)
Scheduled dollar amount varies by
earnings . 1 1 1 - - ®
Other 2 2 i) 1 - -

See footnotes at end of table.

34



Table 44. Medical care benefits: Percent of full-time
participants in plans with hospital room and board coverage
by type of benefit payments, medium and large firms,

1989

Table 45. Medical care benefits: Percent of full-time
participants in plans with inhospital surgical benefits by
type of payment, medium and large firms,

1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and
adminis-| clerical | service
trative | partici- | partici-
partici | pants } pants
pants

All par-

Type of payment teipants

Total 100 100 100 100

Full semiprivate rate’ 28 34 30 24

Full samiprivate rate for limited
period, then percent of semiprivate

@ - - co)

Percent of semiprivate rate 47 45 50 aT
80 percent 35 33 36 96
85 percent 2 2 1 3
90 percent 6 7 8 5
95 percent iv) 9) 0. 9)
Other 2 2 3 2
Varies 1 1 1 1

Percent of semiprivate rate for
limited period, then overall
coinsurance provisions

Daily dollar allowance ° - - 6
Daily dollar allowance, plus percent
of additional charges 2 1 2 3

* Includes full service benefits provided by health maintenance organi-
zations or preferred provider organizations.
? Less than 0.5 percent.

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

54

1
Pro-

Pro-

sn | Tech: | duc-

All ‘and nical | tion

Type of payment Partici-| admin- coal a.

Pants | Ista partici) ice

partici-| Pants |partci

pants pants

Total 400 | 100 | 100

Full usual, customary, and reasonable

charge’ 33 35 32 |. 33

Full usual, customary, and reasonable
charge up to a specified amount, plus
percent of additional charges a...

Full usual, customary, and reasonable
charge up to a specified amount ....

Percent of usual, customary, and
reasonable charge:

0 percent 41 | 41 | 43 | 40
85 percent 8; 2) 2). 3
90 percent 7) 7) 9| 6
95 percent @ (a) @ ®
Other percent e| 9) 6] 7

Percent of usual, customary, and
reasonable charge plus percent of
additional charges based on plan's
coinsurance rate ..

Dollar allowance per procedure, plus
percent of additional charge:

80 percent a

Other percent

8
9;/a; a) 0
@ is) is) 1

Dollar allowance per procedure .

* Includes full service benefits provided by health maintenance or-
ganizations or preferred provider organizations.
® Less than 0.8 percent.

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



cent of participants. Other common maximums were 13
weeks and 52 weeks. The remaining workers had maxi-
mum durations that varied by length of service.

Three-fourths of the employees with sickness and acci-
dent insurance were required to be on the job for a speci-
fied time before they were covered by the plan. This ser-
vice requirement was typically 6 months or less.

Sickness and accident insurance, unlike sick leave, usu-

ally requires a waiting period before benefits begin, most
commonly | to 7 days. Waiting periods may be shortened
or eliminated entirely for employees involved in an acci-
dent or who are hospitalized. Waiting periods may also be
dropped when sickness and accident insurance is coordi-
nated with sick leave, and insurance payments start after
sick leave pay has ended.

Workers in two States, New Jersey and New York, are
covered by mandatory temporary disability insurance
plans that are at least partially employer financed. Both of
these State plans pay benefits based on a percentage of the
worker’s earnings for up to 26 weeks with a limit on the
weekly benefit ($170 in New York and $241 in New Jersey
during 1989).?

Combined sick leave and sickness and accident
insurance benefits

The survey provided data on the combined number of
days of sick leave and sickness and accident insurance
available.’ In 1989, employees had available an average of
98 paid days off at 1 year of service, and 115 days off at 30
years. Averages also varied by occupational group; for ex-
ample, they ranged from 96 days for technical—clerical
workers to 122 days for production-service workers, all
with 10 years of service (table 19).

Payments, particularly from sickness and accident in-
surance, may be less than the regular rate of pay. To ac-
count for this, “full-pay-equivalent days” were devel-
oped. For example, if an employee could receive benefits
for 130 workdays at 50 percent of pay, the tabulations
would show 130 “days available,” but 65 “full-pay—equiv-
alent days” (50 percent of 130 days).

In addition, the “replacement ratio,” defined as the per-

“cent of an employee’s regular pay that is received during
available short-term disability days, provides a measure-
ment of the pay replaced over the term of the disability.
“Replacement ratios” are computed by dividing the “full-
pay—equivalent days” by the “days available.” For exam-
ple, if an employee could receive 100 “days available” and
70 “full-pay—equivalent days,” the “replacement ratio”
would be 70 percent.

= +9 Both States permit an employer to substitute a private plan for the
State plan if the benefits provided are at least equivalent. In New York,
- many employers agree to pay the employee's share of plan costs. Cali-
fornia and Rhode Island also have mandated temporary disability in-
surance plans, but these plans require no employer contribution and,
thus, are not included in this survey. Hawaii, which has a temporary
disability insurance law requiring private plan coverage, is excluded
from the survey.

20

At 10 years of service, workers had an average of 111
days of short-term disability protection available. But, be-
cause many days were paid at partial pay (including some
sick leave days at partial pay), workers would be provided
the equivalent of 66 days at full pay. Thus, if an employee
receiving average benefits was out of work for the entire
111 day period, 60 percent (66 divided by 111) of lost pay
would be replaced. The flow of income, however, would
not necessarily be constant over the disability period. If
the initial days away from work were covered by paid sick
leave (at full pay), and the remainder by sickness and acci-
dent insurance (at partial pay), the initial replacement rate
would be higher than that subsequently received.

Long-term disability insurance

Long-term disability. (LTD) insurance provides a
monthly benefit to employees who, due to illness or injury,
are unable to work for an extended period of time (tables
29-36). Generally, LTD benefit payments begin after 6
months of disability and continue until retirement age, or
for a specified number of months, depending on the em-
ployee’s age at time of disability. In most instances, the
LTD payments take the form of a percentage of predisabil-
ity earnings.

Of the full-time employees covered by the survey, 45
percent had LTD coverage; 20 percent of those employees
with coverage were required to contribute towards the cost
of their plan. Of those with jointly financed LTD plans,
one-third could choose from various options under a “caf-
eteria plan,” with employee contributions varying by the
mix of benefits selected. (See chapter 8 for additional in-
formation on cafeteria plans.) Another one-third contrib-
uted a monthly amount per $100 of covered earnings, with
the most common rate between 20 and 39 cents per $100 of
coverage.!°

Service requirements found in LTD plans were usually
more restrictive than for the other insurance benefits stud-
ied. Because of the long-term nature of the LTD benefits,
more employers restricted eligibility to employees who
had demonstrated some attachment to the company.
While 35 percent of the employees covered by LTD plans
had no service requirement and another 29 percent had
service requirements of | to 3 months, 22 percent of the
participants had service requirements of 1 year or more.
Two percent of the LTD participants were in plans that also
required an employee to have reached a certain age to be
eligible for the benefit.

The degree of participation varied widely among the
employee groups, with white-collar workers more than
twice as likely to have LTD insurance as blue-collar work-
ers. However, many employees not covered under LTD in-
surance are eligible for an immediate disability pension

10 Covered earnings are that portion of a worker's earnings to which
the replacement rate formula is applied. For example, if an LTD plan
pays 60 percent of earnings with a maximum monthly benefit of $3,000,
covered earnings would be $5,000 ($3,000 is 60 percent of $5,000).



the earliest available preretirement survivor annuity was
tabulated.)

Employee contributions

The employer paid the full cost of defined benefit pen-
sion plans for 96 percent of participants. For employees
who had to pay part of the cost, contributions were gener-
ally expressed as a percent of earnings. Typically, partici-
pants in contributory plans paid one rate (usually 2 or 4
percent) on earnings above a specified level, and a lower
rate (or frequently zero) below that earnings level. The an-
nual earnings level at which this break occurred was either
a flat amount stated by the plan, or the Social Security tax-
able wage base ($48,000 in 1989). Plans with varying em-
ployee contributions usually coordinated private benefits
with Social Security payments; as discussed earlier, pen-
sion benefit computation rates used in these plans are often
higher on earnings above the Social Security taxable wage
base. Other participants in contributory plans paid a flat

87

percent of all earnings—rarely more than 3 percent.

Parti

pation requirements

Just over one-third of the employees with defined bene-
fit pension plans had immediate coverage when they were
hired (table 97). Approximately one-fourth could partici-
pate regardless of age but had to meet a years~of-service
requirement, seldom more than 1 year. The remaining
employees generally could not enter the pension plan until
they reached age 21 and completed 1 year of service, the
most restrictive requirement permitted under the Internal
Revenue Code.** For 57 percent of employees with age or
service requirements for plan participation, service prior
to formal entry into the plan was included in the computa-
tion of pension benefits.

38 However, some plans, such as church plans, are exempt from certain
restrictions in the Internal Revenue Code and may require employees
to meet greater age or length of service levels before coverage.



fee schedule. !?

Almost three-fifths of participants covered by vision
care provisions received benefits through a fee-for-service
plan, while one-third were provided benefits through an
HMO.

As noted above, financing arrangements varied by type
of plan. But taking into account all medical, dental, and
vision benefits, 49 percent of health care plan participants
had at least some coverage through employer self-insured
benefits.

Payment arrangements

Plan provisions were examined to determine the extent
of coverage for each type of medical service. In this sur-
vey, each category of medical care is classified under one
of four payment arrangements: full coverage, coverage
with internal (separate) limitations only, coverage with
overall limitations only, or coverage with internal and
overall limitations (table 37).

Full coverage indicates no restrictions on the number of
days of care, no dollar maximums on benefits, and no re-
quired payments by the covered individual. Such full cov-
erage was most common among HMO plans.'3

Separate limitations restrict the level of coverage for a
particular type of medical service, independent of other
plan provisions. An example of a separate limit is a maxi-
mum of 45 days of hospitalization per year for mental
health.

Overall limitations are deductibles, coinsurance re-
quirements, maximum benefit levels, or other provisions
that apply to many, if not all, types of medical care pro-
vided under the plan. Examples of overall limits include a
requirement that the employee pay the first $150 of ex-
penses in a year, regardless of the source of the expense,
before the plan will begin payments (deductible); a re-
quirement that the employee pay 20 percent of covered ex-
penses beyond the deductible (coinsurance); a $1,000 limit
on the amount the employee must pay, after which the
plan pays 100 percent of covered expenses (maximum
out-of-pocket expense); and a lifetime ceiling on plan pay-
ments of $1 million (maximum). Plans often apply overall
limits to protect against high risks posed by a-small pro-
portion of participants.

Separate and overall limitations may apply to the same
category of care. For example, a plan may impose.a sepa-
rate limit of 120 days on fully paid hospital room and
board coverage, with protection beyond that point subject

12 One additional health care funding arrangement, exclusive provider
organizations, was available to a small number of survey participants.
An exclusive provider organization is a group of hospitals and ph
cians that contracts to provide comprehensive medical services. Partici-
pants are required to obtain services from members of the organization
to receive plan benefits.

'3 When a benefit is covered in full, all expenses up to usual, reason-
able, and customary charges, or the prevailing hospital semiprivate
rate, are borne by the plan.

41

to overall plan coinsurance rates and maximum dollar lim-
itations.

Overall limitations

In fee-for-service plans, nearly all categories of medical
care were likely to be subject to overall limitations on plan
benefits. For several categories—such as visits to the phy-
sician’s office, outpatient diagnostic X-ray and laboratory
services, and out-of-hospital prescription drugs—overall
limitations were usually the only type applied (tables 39 to
43).

Plans with overall limitations nearly always require a
participant to meet a specified deductible before eligibility
for benefit payments. This approach is designed to dis-
courage unnecessary use of medical services. Nine-tenths
of the participants in plans with overall limitations were
subject to an annual flat—dollar deductible. Of these par-
ticipants, however, 14 percent were in plans where the de-
ductible did not apply to hospital room and board ex-
penses.

While $100 was the most common individual annual de-
ductible, accounting for one-third of the participants sub-
ject to overall limits, deductibles of $150 and $200 were
also prevalent. The average annual deductible was $174
for all workers.. White~-collar workers with overall limita-
tions on their medical care were required to meet an aver-
age annual deductible that was nearly $25 higher than the
$161 average annual deductible for blue-collar workers.
(See chart 3.)

When a medical.care plan covered an employee and
family, a family deductible was often specified in addition
to individual deductibles. After the family deductible is
met, no additional individual deductibles apply during
that year. Four out of five participants in plans with over-
all limitations had to meet both individual and family de-
ductibles. Most commonly, family deductibles were equal
to two or three times the individual deductibles.

Once the deductible has been met, the plan almost al-
ways pays a specified percentage of covered expenses (usu-
ally 80 percent), with the employee paying the remainder
(coinsurance). Ten percent of participants were in plans
where the coinsurance rate was different for hospital room
and board expenses than for other expenses. In such cases,
the hospital coinsurance percentage was generally higher,
often 100 percent.

Just over four-fifths of participants subject to overall
limitations were in plans where the coinsurance increased
to 100 percent after the individual paid out a specified dol-
lar amount for covered expenses (maximum out-of-pock-
et expense). Three-fifths of participants with overall limits
had an annual individual out-of-pocket expense maxi-
mum of less than $1250, in addition to the deductible.
Maximum out-of-pocket ceilings were also specified for
family expenses in plans covering 49 percent of partici-
pants with overall limitations. The annual maximum for



White-collar

CG Integrated with Social Security
HI Not integrated with Social Security

Chart 4. Defined benefit pension plans: .
white- and blue-collar participants by provisions for integration
with Social Security benefits, medium and large firms, 1989

Percent of full-time

Blue~collar

ment. The calculations assume employees retired on Janu-
ary 1, 1989, and final earnings are for 1988.%°

Average replacement rates resulting from defined bene-
fit pension plans alone and in combination with primary
Social Security benefits (that is, excluding benefits for
spouse and other dependents) are presented in table 85.7!
For private pension formulas that are integrated with So-
cial Security and for computation of Social Security bene-
fits, the worker is assumed to have retired at age 65 and to
have paid into Social Security for 40 years.

Chart 5 displays replacement rates based on 30 years of
service for each of the earnings assumptions. Except for
the lowest earnings assumption ($15,000), the private pen-
sion plan replaced on average about 30 percent of the final
year’s earnings; the rate for $15,000 was about 35 percent.

When combined with primary Social Security payments

30 Barnings histories, necessary for applying the pension formulas,
were constructed for each final earnings level based on data provided
by the Social Security Administration.

3)-The Social Security spouse benefit, which is 50 percent of the prima-

ry benefit, is paid in addition to the primary benefit while both partners
are alive (unless the spouse is eligible for a larger primary benefit).

82

available at age 65, however, replacement rates differed
substantially as earnings increased. Workers earning
$15,000 in their final year had about four-fifths of earn-
ings ($11,910) replaced after 30 years of service, while just
under one-half of earnings was replaced for workers at the
highest earnings level computed ($55,000 x .494
$27,170). The primary Social Security benefit payment
was larger than the average private pension at lower earn-
ings levels, but the pension benefit became the greater
component as earnings increased.

Although private pension replacement rates (excluding
Social Security) for white-collar employees remained fair-
ly constant at higher earnings levels, rates for blue-collar
workers dropped by about a third. Table 77 provides an
explanation: Nearly two-fifths of all production and ser-
vice workers have dollar~amount formulas, paying work-
ers with the same years of service the same benefit, regard-
less of earnings history. The result is.a steady decrease in
the replacement rate as final earnings increase. Average
replacement rates for earnings—based formulas, on the
other hand, increase slightly with higher final earnings.


Table 51. Medical care ben

si Percent of full-time
Participants in health maintenance organizations by selected
plan features, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
‘At par-| 87d | cal and | tion and
tem ticipants [24minis-| clerical } service
Pants | ‘trative | partici- | partici
partici- | pants | pants
pants
Extended care facilities
Total 100 | 100 } 100 | 100
Provided coverage 93 94 94 92
Limited number of days 61 64 60 58
Unlimited number of days .. 32 30 34 34
Not provided coverage .. 7 6 6 8
Physician's office visits
Total 100 | 100 | 100 | 100
Provided coverage .... 400 | 100 | 100 | 100
‘Sublect to copayment per visit...) 55 87 60 49
it. 2 2 3 1
8 8 9 9
1" 12 10 9
2 2 3 1
$5 per visit 27 28 30 24
More than $5 per visit. 6 8 5 6
Subject to other limits... 1 1 1 1
Covered in full ... 44 42 39 50
Outpatient prescription drugs
Total .. 100 100 100 100
Provided coverage . 90 92 90 88
Subject to a copay,
prescription 75 75 75 73
Less than $1 per prescription; (*) iy) is) i)
$1 - $1.99 per prescription . 4 4 5 4
$2 - $2.99 per prescription ...| 17 14 16 20
$8 - $3.99 per prescription ...| 26 30 26 23
7 7 6 9
$5 or more per prescription... 20 20 22 18
‘Subject to other limits" 7 8 6 7
Covered in full 9 9 8 38
Not provided coverage . 10 8 10 12

‘ Includes plans that require participants to pay a percentage of the

charges incurred.
* Leas than 0.6 percent.

NOTE: Because of rounding, sums of individual Items may not equal to-
tals, Where applicable, dash indicates no employees In this category,

59



Chart 5. Defined benefit pension plans: Average replacement
rates including and excluding Social Security payments, based on 30
years of service, medium and large firms, 1989
Average replacement
rate (percent)
80
O) Private pension only
70 5 TM@ >Combined private pension
and primary Social Security
payment
60 -
50 4
40 -
30
20 +
10 4
0
$15,000 $20,000 $25,000 $35,000 $45,000 $55,000
Worker's final year's earnings

Normal retirement

A majority of defined benefit pension plan participants
could retire before age 65 and still receive full private pen-
sions (normal retirement benefits) (table 86). Thirty-eight
percent of participants were required to be age 65 to re-
ceive such unreduced benefits, down from 41 percent in
1988. Workers who were age 65 usually did not have to
satisfy a length-of-service requirement.

When normal retirement was permitted prior to age 65,
however, plans generally imposed a minimum service re-
quirement. For example, normal retirement at age 62 was
available to 22 percent of participants but nearly three-
fourths had to have worked 10 years or more; 13 percent
could retire at age 60, but the majority of these workers
also had a service requirement. Few participants could re-
tire with unreduced benefits prior to age 60, but those who
could generally had to work 30 years. Retirement at any
age with the required amount of service was twice as com-
mon in plans covering blue-collar workers as in those cov-
ering white-collar workers.

Plans that required combining a worker’s age and ser-
vice to reach a specified sum for retirement with full bene-

83

fits covered 12 percent of participants. The most common
age—plus-service requirements were 85 and 90. This type
of arrangement usually specified a minimum age of 55.
Minimum lengths of service were less common. (When a
plan specified alternative age and service requirements for
normal retirement, such as age 62 with 10 years of service
or age 55 with 20 years of service, the earliest age and asso-
ciated service was tabulated. This is also true for early re-
tirement age and service requirements discussed below.)

Early retirement

Virtually all of the employees participating in defined
benefit pension plans could retire before normal retire-
ment age and receive an immediate, but reduced, pension
(tables 87 to 88). Early retirement was almost always
solely at the employee’s option; only 1 percent of partici-
pants were in plans that required employer approval for
early retirement benefits. The amount of an early retire-
ment pension is reduced because benefits begin at an earli-
er age and the retiree is expected to receive plan payments
over a longer period of time.

For 95 percent of participants in plans that allowed ear-



Table’ 107. Saving and thrift plans: Percent of full-time
participants by provisions for withdrawal of employer
contributions prior to disability, retirement age, or
termination of employment, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
‘All par- | 204. | cal and |tion and
Least restrictive provision ticipants |2°Minis-] clerical | service
trative | partici- | partici-
partici: | pants | pants
pants
Total 100 | 100 | 100 | 100
Withdrawals permitted cal 74 70 68
For hardship reasons" 34 34 36 32
Full withdrawal, no penalty 22 at 22 22
Full withdrawal, with penalty | 7 6 6 7
Partial withdrawal, no penalty| 5 7 6 3
Partial withdrawal, with
penalty ... a) ° a} o)
Not determinable a (0) 6 1
For any reason 37 39 35 35
Full withdrawal, no penalty 18 16 15 14
Full withdrawal, with penalty .| 16 16 15 18
Partial withdrawal, no penalty] 2 4 2 1
Partial withdrawal, with
penalty 2 3 2 2
Not determin: Q fe) el -
No withdrawals permitted 29 26 30 92

* Commonly expressed reasons for withdrawal were: Purchase or repair
of primary residence, education of an immediate family member, death or
illness in the family, or sudden uninsured loss.

® Less than 0.5 percent,

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

Table 108. Savings and thrift plans: Percent of full-time
participants by method of distribution of account at
retirement, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
‘Altpar |_2n4__| cal and |tion and
Method of distribution available ticipants adminis-| clerical | service
‘cipants | ‘trative | partici- | partici-
partici | pants | pants
pants
Total .. 100 100 100 100

Cash distribution’...
Lifetime annuity (including

7 97 96 96

joint-and-survivor forms) . 28 25 24 33
Instaltments - vs 52 53 52 50
Lump sum .. 96 96 95 96

Stock distribution* iv) 1) co) -
Not determinable 3 3 4 4

* The total is less than the sum of the individual items because many
participants are offered optional forms of cash distribution,

? Employer and employee contributions are invested solely in company
stock, which is automatically distributed upon retirement or termination of
employment.

* Less than 0.5 percent.

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

118

Table 109. Deferred profit sharing plans: Percent of
full-time participants by selected provisions, medium and
large firms, 1989

Protes-
sional | Techni- | Produc-
and | cal and | tion and
Item faire | adminis-| clerical | service
ip trative | partici | partici-
partici- | pants | pants
pants
Total... 100 | 100 | 100 | 100
Method of determining employer
contributions
Based on stated formula . co | so | sa | 65
Fixed percent of profits .. 10 W 9 9
Sliding percentage based on
Profits, sales, or return on
asset 18 | 12 | 10 | 24

Determined by unit profits

Other stated formula . 33 33 35 32

No predetermined formula .. 40 44 46 35
Allocation of profits to individual
employees

Equally to all participants 1 - - 1
Based on earnings ... 64 67 7 60
Based on earings and service 9 10 8 9
Based on participants’ contributions 9 7 7 "
Other? 7 16 14 18
Loans from employees’ accounts

Permitted . 19 28 28 4
Not permitted .. Bt 72 72 89

* Less than 0.5 percent.

* Includes participants in plans that based allocation on unit perfor-
mance or the ratio of employee compensated hours to total compensated
hours.

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



Chapter 8. Plan Administration

In addition to the data on individual benefit plans, the
survey explored how insurance and retirement benefits
were administered and financed, and whether benefits
were offered independently or as part of a flexible benefits
program.

Plan sponsor

Single employers were the predominant sponsors of
most major benefit plans offered to full-time workers in
medium and large firms (table 112). Nearly all partici-
pants in life insurance, health care, long-term disability in-
surance, and defined benefit pension plans were in single-
employer plans. Eighty-two percent of sickness and
accident insurance participants were in single-employer
plans; most of the remaining participants were covered by
State temporary disability insurance benefit plans.*
(State plans are discussed in chapter 5.)

Multiemployer plans result from agreements between
employers within an industry or related industries and one
or more labor unions. These plans allow employees mov-
ing from one employer to another within an industry to re-
ceive the same or similar benefits. Defined benefit pension
and health care plans were the most common benefits
sponsored by multiemployer groups, and production-ser-
vice employees were the most likely recipients of such
benefits. The scope of the survey, which excludes estab-
lishments with under 100 employees, may account for the
small representation of multiemployer plans. The inclu-
sion of small establishments in such industries as contract
construction and trucking might increase the prevalence
of such plans.

Plan financing

Generally, there were many more participants in wholly
employer—financed plans than in partly employer-fi-
nanced plans (table 113). Employee contributions were
most often required for medical and dental care, particu-
larly for family coverage. In fact, more than three-fifths of
the medical and dental care plan participants were required
to contribute toward the cost of family coverage.

‘3 Mandatory benefits were also included for railroad employees. A
small number of workers received sickness and accident insurance
through the Railroad Unemployment Insurance Act, and defined bene-
fit pension plans through Tier 2 of Railroad Retirement. Railroad Re-
tirement is a federally mandated defined benefit pension plan for em-
ployees in the railroad and related industries; Tier 2 resembles a private
plan. .

121

For almost all benefits, a greater percentage of blue-col-
lar workers than white-collar workers participated in
wholly employer-financed plans. The exceptions were life
insurance and defined benefit pension plans, where the ra-
tio of contributory to noncontributory plans was similar
for all occupational groups.

Flexible benefits plans and reimbursement
accounts

Traditionally, employers have offered their workers
benefit plans in a number of areas, such as health care, life
insurance, and retirement. Employees may have a choice
between one plan or more in a benefit area, for example,
between a commercial health insurance plan and a health
maintenance organization, but plans in each area are of-
fered separately. In recent years, however, new ap-
proaches to offering benefits have attracted considerable
attention. Since 1986, BLS has studied two-arrangements
for offering such benefits—flexible benefits plans and re-
imbursement accounts (table 114).

Flexible benefits plans, reimbursement accounts, or
both were offered to 24 percent—7.8 million—of the em-
ployees in medium and large firms in 1989, up from the 13
percent reported in 1988. In 1986, when the Bureau first
studied there plans, they were offered to 5 percent of em-
ployees. Flexible benefits plans and reimbursement ac-
counts were more common among white-collar workers
(35 percent) than among blue-collar workers (11 percent).

Flexible benefits plans, also known as cafeteria plans,
covered 9 percent of all workers.“ These arrangements
allow employees to choose between two types of benefits or
more. The most common choices offered were health care;
life and long-term disability insurance; and the option of
receiving cash instead of benefits. Less common choices
included extra sick leave and vacation days, the option to
deposit funds into a tax-deferred retirement plan, child
care expenses, sickness and accident insurance, and group
legal services. Pensions are usually fixed benefits and not
part of a flexible benefits program.

Twenty-three percent of all workers were eligible for re-
imbursement accounts, which provide funds from which

For this survey, a plan had to allow choices among two types of
benefits or more to be classified as a flexible benefits plan. Thus, plans
that permitted a selection in only one benefit (for example, a choice
among several health care options or plans) were not classified as flex-
ible benefits plans.



Table 24. Paid annual sick leave:' Average number of days
at full pay for full-time participants by sickness and accident
insurance coordination, medium and large firms, 1989

Table 25, Paid annual sick leave:' Percent of full-time
participants by unused sick leave policy and carryover
provisions, medium and large firms, 1989

Protes- Protes-
sional | Techni- | Produc- sional | Techni- | Produc-
and | cal and | tion and i and | cal and | tion and
Item feet | adminis-| clerical | service Unused sick eave oocyte oatg adminis-| clerical | service
ip trative | partici- | partici- iTyover pr pi trative | partici- | partici-
partici- | pants | pants partici- | pants | pants
pants Pants
Unused sick leave policy
Att year of service:
Total 100 | 100 | 100 | 100
With sickness and accident
insurance 93} 131] 104 63 Carryover only 39 39 45 33
Without sickness and accident Cash-in only 10 4 6 21
insurance 187| 255) 163) 122 Carryover and cash- 10 6 t 13
Unused benefit lost 4 51 38 33
At 5 years of service: Data not available .. (a) 0 cs) a)
With sickness and accident Carryover provisions
insurance 134) 206] 145] 78
Without sickness and ac . Total 100 100 100 100
insurance aas| 934) 211} 169
Unlimited accumulation 31 34 36 23
At 10 years of service:
Limit on total number of days
With sickness and accident accumulated 68 64 63 7
insurance 1e3| 260] 174! 90
Without sickness and accident Under 10 days .. 3 2 2 ?
insurance 298} 40.0| 264] 200 10 days .. 3 3 2 4
11 - 19 days . 3 1 2 6
At 16 years of service: 20 daY8 vrnnn 2 1 2 4
21 - 24 days 2 2 1 2
With sickness and accident 25 days... io) i) a) 1
insurance 172) 277} 180) 96 30 days . 12 7 8 20
Without sickness and accident 31 - 39:-days, 1 1 1 1
insurance 318] 424] 282| 218 40 - 49 days 6 6 4 8
50 days . 1 1 2} @
At 20 years of service: 51 - 64 days ? 8 8 7
65 days . 2 2 2 3
With sickness and accident 66 - 79 days 2 2 3 1
insurance 18.2 29.4 18.9 10.2 80 - 89 days 1 a 1 1
Without sickness and accident 90 - 99 days 4 5 3 3
insurance 331} 440} 29.2) 228 100 - 109 days 2 2 2 1
110 - 119 days (0) (7) is) -
At 25 years of service: 120 - 129 days 5 6 6 2
130 days 5 7 5 2
With sickness and accident Over 130 days 6 8 7 6
insurance 1a8| 304) 195| 107 Days not available .. ° 1 ta) ro)
Without sickness and accident
insurance 336] 447| 206) 234 Other’... 1 2104 i)
Data not available i] 9) 1 is)

* Paid sick leave plans with a specified number of days available each

year.

NOTE: Computation of average excluded days paid al partial pay and

workers with only partial pay days or zero days of sick leave.

28

* Paid sick leave plans with a specified number of days available each

year.
® ‘Less than 0.5 percent.

* Carryover provisions vary by length of service.

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



Table 1. Summary: Percent of full-time employees participating’ in selected employee benefit programs, medium and large

firms,’ 1989

Profes-
sional | Techni |Produe-

Allem-| and eal and) 208
Employee benefit program ploy- | admin- | clerical | 270,
ees" istrative |employ- | Senice

lemploy-| ees* PIOY-

ees? ses

Profes-
sional | Techni- Produc
Altem-| and cat and} 200
Employee benefit program clerical service
istrative lemploy-| ory.
lemploy-| ees?
ees* ees*
Paid:
Holidays 97 | 97 | 96} 97
Vacations 97 | 98 | 99 | 95
Personal leave 22} 28 | 30) 14
Lunch period . 10 4 4| 16
Rest time 71 | 87} 69 | 80
Funeral leave e4 | 87! 86 | 80
Jury duty leave so | 95} 92) 87
Military leave . 53 | 61 | 57 | 45
Sick leave es | 93} 97 | 44
Maternity te 3 4 2 3
Paternity leave 1 2 1 1
Unpaid:
Maternity leave a7 | 39 | 37 | 35
Paternity teave . iw | 20 | 17) 17
Sickness and accident insurance 43 | 29 | 29) 58
Wholly employer financed 36} 22 | 22) 51
Partly employer financed 7 7 7 7

Long-term disability insurance 4s | 65 | 57 | 27
‘Wholly emptoyer financed

Partly employer financed

9 15 14 4

Medical care sz} 93 | 91) 93
Employee coverage:
‘Wholly employer financed
Partly employer financed
Family coverage:
Wholly employer financed
Partly employer financed

48 45 a 54
44 48 50 39

31 28 25 37
60 64 66 54

66 69 66 65

34 32 31 38
32 37 36 27

Wholly employer financed ...
Partly employer financed

[Dental care—Continued
Family coverage:

Wholly employer financed ..

Partly employer financed

21 28
46 37

Life insurance
Wholly employer financer

- 81 83
Partly employer financed

23
46

94 95 94 93
82
13 14 w

[All retirement ........

Defined benefit pension ....
Wholly employer financed ..

Partly employer financed 3 2 3

Defined contribution’ so | 52] 40
Uses of funds:

Retirement? 43 | 39] 31

Wholly employer financed’ ..
Partly employer financed
Capital accumulation®
Wholly employer financed’ .
Partly employer financed
Types of plans:
Savings and thrift
Deferred profit sharing ..
Employee stock ownership
Money purchase pension
Stock bonus

ry
3
a

|Stock option

|Stock purchase ...

(Cash only profit-sharing §...

Flexible benefits plans

[Reimbursement accounts 23 36 31 "

* Participants are workers covered by a paid time off, insurance, re-
tirement, or capital accumulation plan. Workers eligible for paid or un-
paid maternity and paternity leave are also covered. Employees subject
to a minimum service requirement before they are eligible for benefit
coverage are counted as participants even if they have not met the re-
quirement at the time of the survey. If employees are required to pay
part of the cost of a benefit, only those who elect the coverage and pay
their share are counted as participants. Benefits for which the employee
must pay the full premium are outside the scope of the survey. Only
current employees are counted as participants; retirees are excluded.

* See appendix A for scope of study.

5 See appendix A for definitions of the occupational groups.

“ Includes defined benefit pension plans and defined contribution re-
tirement plans. The total is less than the sum of the individual items be-
‘cause many employees participated in both types of plans.

5 The total is less than the sum of the individual items because some

employees participated in both retirement and capital accumulation
plans, and in more than one type of pian.

* Plans were counted as retirement plans if employer contributions
had to remain in the participant’s account until retirement age, death,
disability, separation from service, age 59 1/2, or hardship.

” Employees participating in two or more plans were counted as par-
ticipants in wholly employer-financed plans only if all plans were noncon-
tributory.

* Includes plans in which employer contributions may be withdrawn
from participant’s account prior to retirement age, death, disability, sepa-
ration from service, age 59 1/2, or hardship.

© Less than 0.5 percent.

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



the breadth and depth of the information available on the
magnetic tapes. Coverage of other benefits is similarly de-
tailed.

Medical and dental care data base:
Plan participation requirements
Employee monthly contribution for employee and

family benefits
Pretax status of contributions

Fee arrangement and funding media
Medical coverage
Dental benefits
Vision benefits

Administration
Preexisting conditions
Difference in benefits provided for employee and
spouse

Effect of layoff and retirement

Retired employees benefit coverage
Laid-off employees benefit coverage

Hospital coverage
Hospital room and board coverage
Hospital miscellaneous charges

Extended care
Extended care facility coverage
Home health care coverage
Hospice coverage

Surgical coverage
In-hospital surgical coverage
Second surgical opinion
Outpatient surgical coverage

Physician charges
In-hospital coverage
Office visit coverage

Maternity care benefits
Who is covered

Diagnostic X-ray and laboratory testing coverage
Accidental bodily injury benefit
Private duty nursing benefit

Mental health care benefits
In-hospital room and board charges
In-hospital physician charges
Coverage for mental or psychiatric hospital
Outpatient mental health care

Substance abuse benefits
In-hospital rehabilitative care

136

In-hospital detoxification care

Outpatient care

(separate questions for alcohol abuse and drug
abuse)

Other benefits
Hearing care
Orthoptics
Physical examinations
Organ transplants
Well-baby care
Immunization and inoculation
Long-term nursing care

Cost containment features

Dental care benefits
Who is covered
Prophylaxis and routine exams
X-rays
Fillings
Surgery—dentai
Periodontal care
Endodontics
Inlays
Crowns
Prosthetics
Orthodontia
Preauthorization requirement

Vision care benefits
Who is covered
Eyeglasses
Eye examinations
Contact lenses

Prescription drug benefits

Overall limitations
Out-of pocket expense limitation
Overall deductible
Overall maximum
Overall coinsurance

Each medical expense section (e.g., hospitalization, pre-
scription drugs, physician charges) contains information
on internal limitations; these limits apply only to that cate-
gory of care. For example, hospital room and board may
have an internal limit of 120 days per confinement. Infor-
mation on overall limitations is also included in each sec-
tion, identifying limits that apply to more than one
category of care. These overall limitations—deductibles,
maximums, coinsurance, and out-of-pocket expense limi-
tations—are then described at the end of the manual.
Three sets of data on overall limitations are available for
plans that include multiple overall limits.

#ULS. G.P.0. 1990-262-285 126164



1989, up from 84 percent in 1982. Outpatient mental
health care was commonly covered for fewer visits per
year than other outpatient services, subject to special max-
imum dollar limits on annual payments, and covered at a
coinsurance rate of 50 percent rather than the usual 80
percent paid by the plan for other illnesses. Also, outpa-
tient mental health care expenses often did not count to-
ward the maximum out-of-pocket expense limitation, and
the reimbursement for these expenses did not increase to
100 percent if the out-of-pocket expense limitation was
met.!7

Alcohol and drug abuse treatment

Alcohol and drug abuse treatment benefits covered 97
and 96 percent of health care participants, respectively.'8
Benefits provided under substance abuse care included
both detoxification and rehabilitation. Detoxification pro-
vides supervised care by medical personnel to reduce or
eliminate the symptoms of chemical dependency. Reha-
bilitation is designed to provide a variety of services in-
tended to alter the behavior of substance abusers. Such
services are generally provided once detoxification has
been completed.

Almost all participants covered by some form of alcohol
abuse benefits were eligible for inpatient (in-hospital) de-
toxification, and 68 percent for inpatient rehabilitation
(tables 49 to 50). Detoxification is generally considered
medically necessary, and thus it is included in nearly all
medical plans. There is a greater tendency to exclude in-
patient rehabilitation, since it requires less constant, im-
mediate care. Outpatient alcohol abuse treatment, gener-
ally rehabilitative care, was available to 61 percent of
participants with alcoholism coverage. Coverage patterns
were similar for drug abuse benefits.!9

As is true for mental health care, plans were more re-
strictive in covering substance abuse treatment than other
illnesses. It was more likely, however, for inpatient detoxi-
fication to be treated the same as other conditions than in-
patient rehabilitation or outpatient care. Nearly three-
fifths of the participants with inpatient alcohol detox-
ification care had their coverage either subject to separate
limitations or to the same limitations as for mental ill-
nesses. This contrasts with inpatient rehabilitation and

'7 A detailed examination of mental health care provisions in em-
ployer-provided health care plans is provided by Allan P. Blostin in
“Mental Health Benefits Financed By Employers,” Monthly Labor
Review, July 1987, pp. 23-27.

18 The large increase in the incidence of alcohol and drug abuse treat-
ment benefits (up from 80 and 74 percent, respectively, in 1988) is due
to an increase in the extent of such benefits in medical care plans and
a refinement in the survey’s procedures for tabulating detoxification
benefits.

19 The extent of coverage for rehabilitation and outpatient care is
largely unchanged from 1988. However, the percentage of workers with
substance abuse benefits who have these coverages declined. This is due
to the increase in the incidence of detoxification benefits, which caused
and increase in the total number of workers with substance abuse bene-
fits.

43

outpatient care, where nearly nine-tenths of participants
had their coverage subject to separate limitations or cov-
ered the same as mental health care.

Separate limitations for substance abuse treatment most
commonly included restrictions on the number of days of
inpatient hospital care per year, the number of outpatient
visits per year, and maximum dollar amounts of benefits
per year or per lifetime. Limitations on days and dollars
were often combined for alcohol and drug abuse care. A
typical limitation on inpatient care was 30 days per year.
Similarly, outpatient care might be restricted to 20 or 30
visits by a care provider per year.

Health maintenance organizations

The survey tabulated the details of three categories of
medical care provided by HMO’s—physicians’ office visits,
out-of-hospital prescription drugs, and extended care fa-
cilities (table 51). For physicians’ office visits, 55 percent
of HMO participants were required to pay a copayment,
typically $3 or $5 per visit, before treatment was received.
Most of the remaining participants received coverage in
full. In general, HMO’s do not limit the number of physi-
cians’ visits.

Out-of-hospital prescription drug benefits were avail-
able to 90 percent of HMO participants and slightly more
than four-fifths had to pay a copayment per prescription,
commonly between $2 and $5. Finally, extended care
treatment facility benefits were available to 93 percent of
HMO participants, most commonly with a limit on the
number of days for which care was available.

Cost containment

To help contain costs of health care, a number of plans
provide less expensive alternatives to a hospital stay. Cov-
erage for treatment in an extended care facility was avail-
able to 80 percent of the participants in 1989. Home health
care was covered for 75 percent of participants, and 42
percent of participants had coverage for hospice care for
the terminally ill (up 4 percentage points from 1988).

More generous benefit provisions for prehospitalization
testing, a means of decreasing the length of hospitaliza-
tion, covered 42 percent of the health plan participants.
Certification before hospital admission (generally by an
insurance company) was required of 44 percent of partici-
pants (table 52).

Some cost containment measures encouraged alterna-
tive means of obtaining prescription drugs. Ten percent of
all plan participants received higher reimbursements for
mail order drugs than for drugs purchased over the
counter, compared with 7 percent in 1988, and 14 percent
received higher reimbursement for obtaining generic rath-
er than name brand prescription drugs.

Less common cost containment features included in-
centives to the employee to audit hospital bills (available to
5 percent of participants) and limitations on payments for
nonemergency admissions to hospitals on weekends (in



Travel accident insurance, for employees traveling on
employer business, and employee discounts on purchases
of the employer’s goods or services, were available to just
over half of all employees.

About one-fourth of all employees were eligible to use
employer—provided recreation facilities. In the area of fi-
nancial and legal services, 9 percent of employees were eli-
gible for financial counseling and 4 percent were eligible
for prepaid legal services. Five percent of employees were
eligible for each of the following benefits: Supplemental
unemployment benefits, subsidized commuting, and em-
ployer financial assistance for adoption proceedings.

Employer-subsidized child care, a benefit that has re-
ceived much attention in recent years, was available to 5
percent of employees, up from 1 percent in 1985. In this
survey, child care benefits were limited to employer—subsi-
dized facilities or full or partial reimbursement to em-
ployees for the cost of caring for a child in a nursery, day
care center, or by a babysitter, on or off the employer’s
premises. Situations where employers provided only in-
formation and referral services were not included.*

Eldercare, a benefit that includes employer subsidies for
day care for elderly or disabled dependents, or time off for
employees to handle such matters, was studied for the first
time in 1989. Three percent of employees had such bene-

$ For further analysis of child care, see Howard V. Hayghe, “Employ-

ers and Child Care: What Roles Do They Play?” Monthly Labor
Review, September 1988, pp. 38-44.

fits available.®

The incidence of several benefits differed markedly by
employee group. Among these were relocation expenses
and travel accident insurance, for which a larger propor-
tion of professional and administrative employees were
usually covered. This may be due in part to the greater
likelihood of moving and travel among professional and
administrative workers than among the other groups. For
example, full or partial payment by the employer of reloca-
tion expenses for transferred or newly hired employees
was available to nearly seven-tenths of professional and
administrative employees, but to only three-tenths of the
technical and clerical employees, and one-fifth of the pro-
duction and service employees. Job-related travel acci-
dent insurance was available to two-thirds of the white—
collar employees, almost twice the proportion of
blue-collar workers covered.

Severance pay, subsidized meals, financial counseling,
employer assistance for adoptions and child care, and sub-
sidized commuting were other benefits found almost twice
as frequently among white-collar employees. Only supple-
mental unemployment benefits were substantially more
common among blue-collar employees than among
white-collar employees.

© See chapter 9, Plan Administration, for in formation on reimburse-
ment accounts, an alternative means of subsidizing dependent care ex-
penses.



Table 30. Long-term disability insurance: Percent of full-time parti

ipants with benefits based on percent of earnings

formula by maximum monthly benefit, medium and large firms, 1989—Continued

Total Maximum monthly benefit No
with maxi-
Type of payment Total | maxi | $1800 | $1501- | $2001- | $9001- | $4001- | $s001- | $7601- | st0,001| Other | Thum
mum' | or less | $2000 | $3000 | $4000 | $5000 | $7500 | $10,000] or more fun? payment
Production and service
Total 100 68 10 8 ? 6 12 6 7 4 6 32
Fixed percent of earnings .. 86 58 9 8 7 6 12 5 6 4 1 28
Less than 50 percent 2 1 °) 9) - is) - - iv) 1 - 1
50 percent 27 13 3 3 (0) 1 @ iv) 3 1) 1 14
60 percent 44 34 3 3 7 4 10 2 2 3 - 1
65 or 67 percent 10 10 2 2|/ @ e 2 2 1 iv) - 1
70 percent or more 2 @ - - - io) io) io) iv) iv) - 1
Other precent iv) ca) iV) is) - - - a) - 0 0)
Percent varies by earnings 7 4 1 - e) - 1 1 i) - 3
Percent varies by service 6 6 9) ca) - - iv) - - 6 1
Percent varies during disability. 1 (eo) - - 0] ~ ® - - - - 1

* Maximum payment from plan before offsets are deducted. Ex-
cludes disability income maximum provisions, which do not restrict
LTD payments unless the level of income guaranteed by the plan
plus other nonoffsetting income exceeds a specified percentage of
predisability earnings or flat doflar amount.

* Includes maximums that vary with years of service.

Table 31. Long-term disability insurance: Percent of
full-time participants with maximum disability income
provisions’ by type and amount of maximum, medium and
large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and
adminis-| clerical | service
trative | partici- | partici-
partici. | pants pants

All par-

Disability income maximum | A Pe

Total 100 | 100 100

Fixed percent of employee's

‘eamings ot 93 1 86
Less than 70 percent 4 7 3 1
70 percent 31 34 29 29
75 percent 24 16 23 36
80 percent 7 7 22 8
More than 80 percent 15 19 14 1
Other percent ...... ts) e ) °)

Percent varies by employee's

earings
Other* 9) a 1 ce)
Not determinable 8 6 8 "1

* Ceilings on income during disability that limit the total amount payable
from the long-term disability insurance and other income.

® Less than 0.6 percent.

* Includes maximum benefits specified as a dollar amount.

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

37

* Less than 0.5 percent.

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

Table 32. Long-term disability insurance: Percent of
full-time participants by benefit waiting period,’ medium and
large firms, 1989

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

All par-

Length of waiting period ticipants

pants
Total 100 | t00 | 100 | 100
Less than 3 months 2 2 2 1
3 months 18 2 ay 1"
4-5 months .. 6 7 6 5
6 months 48 49 52 4
7-11 mont 1 1 1 ts)
1 year or more ... 3 4 3 2
Varies by duration of short-term
disability benefits at 15 4 36
Not determinable 1 1 3

* Length of time between onset of disability and beginning of LTD pay-
ments.

? Less than 0.5 percent.

* Benefits commence after expiration of paid sick leave and/or sick-
ness and accident insurance benefits.

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



Table 105. Savings and thrift plans: Percent of full-time participants by provision.for employer matching contributions,

medium and large firms, 1989—-Continued

Matching percentage*
Employee earnings to be matched’ | Total Other fixed | Varies with | Varies with
25 percent | 50 percent | 75 percent |100 percent! er entages| contribution| profits | other
Production and service
Total 100 10 46 1 10 8 6 " 8
Up to the first
2 percent 8 - 1 - 2 - v) iy]
3 percent 4 iv) 1 - 2 iy) 0 1 0
4 percent 12 4 3 ) 1 1 - Co 1
5 percent 15 1 7 “ 1 2 1 3 1
6 percent 50 4 25 1 3 4 3 6 4
7 percent 3 - 2 - ) 1 iV) - -
8 percent 1 - 9) 0 oO iy) oO : iv)
10 percent 3 1 2 - - - - 0) i)
Greater than 12 percent 2 ful 1 - iv) iv) 1 oO -
Specified dollar amount 6 - 5 - i) 1 - - )

* Employee may contribute a percent of salary up to a specified maxi-
mum; ceilings on contributions to be matched by employers generally are

lower.

both, the highest possible percentage was tabulated.
® The percentage of matchable employee contributions added by em-
ployers. Some plans specified a maximum annual employer contribution.

If the maximum varied by participant's length-of-service, age, or

* Includes percentages that vary by type of investment chosen and by

length of service.
“Less than 0.5 percent.

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

totals. Where applicable, dash indicates no employees in this category.

Table 106, Savings and thrift plans: Percent of full-time participants by provisions for investment of employer and employee
contributions, medium and large firms, 1989

ini Professional and administra- Technical and clerical Production and service
All participants tive participants participants participants
Characteristic
Employer | Employee | Employer | Employee | Employer | Employee | Employer | Employee
contributions | contributions | contributions | contributions | contributions | contributions | contributions | contributions

Total in plans permitting investment

choices by employees’ 53 20 58 93 51 92 49 a6

Investment choice

Total 100 100 100 100 100 100 100 100
Company stock 50 60 51 59 47 60 51 63
‘Common stock fund 83 79 85 84 85 78 76 72
Long-term interest bearing securiies| 37 32 38 37 44 36 29 22
Diversified mix of stocks and bonds 31 26 29 26 32 25 31 25
Government securities 23 25 26 30 24 25 17 21
Guaranteed investment contract 59 64 59 61 51 59 68 72
Money market funds 41 35 44 40 47 39 31 27
Certificates of deposit 4 3 4 3 7 4 1 1
Other’. 7 10 7 12 9 8 5 8
Investment choices not

determinable . 2 1 2 1 2 1 1 1

Number of choices

Total 400 100 100 100 100 100 100 100
Two 22 25 16 19 21 27 31 30
Three .. 40 36 43 37 34 30 a rt
Four 20 23 21 25 21 25 7 19
Five or more 16 45 18 19 22 16 40 9
Investment choices not

determinable .. 2 1 2 1 2 1 1 1

* Excludes plans that limit investment options to participants age 55 or

greater.

? Includes purchases of life insurance or annuities, real estate,
mortgages, and deposits in credit union or savings accounts.

117

NOTE: Because of rounding, sums of individual items may not equal
Where applicable, dash indicates no employees in this category.

totals.



Table 15. Paid military leave: Percent of full-time
employees by number of paid military leave days available
per year, medium and large firms, 1989

Profes-
sional | Techni. Preaue-
Alvem-| 2nd cal and) ang
Number of days admin. | clerical
ployees: ‘service
istrative jemploy-| =
employ) ees |°MPOY
eos

Total .. 100 j 100 | 100 | 100

53 61 87 4
2 1 4
1) O 0

Provided paid military leave .. 5
1
1
37 34 26
1
2
1
1

5 days
6-9 days
10 days
11-14 days ..
15 days
16-19 days ..
20 days
21-29 days,
30 days ...
More than 30 day:
No maximum spec
Number of days not available

aeons

ty 1) 10) 0)
2 2 1 2

0 ) oO 1)
1 i241

io) Yo ie) ie)
a7 | 39 | 43 | 56

Not provided paid military leave

‘ Less than 0.5 percent.
Military leave is provided as needed.

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

Table 16. Parental leave: Percent of full-time employees by leave
policy, medium and large firms, 1989

Profes-
, [sional ana) TeGnyca! | Procrgion
Employer leave polcy employees) 227M | ctercat | service
employees | TMPIovees| employees
Total 100 100 100 100
Eligible for parental leave’ .. 44 45 41 39
Eligible for maternity leave 4 44 4 a9
Paid days only .. 2 2 1 2
Unpaid days only 35 37 36 34
Both unpaid and paid days ... 1 2 1 1
Information not available on
type of days ... . 2 3 2 2
Not eligible for maternity
leave ... ® 1 o) 0)
Eligible for paternity leave 20 23 20 19
Paid days only .. 1 2 1 1
Unpaid days only . 18 20 17 7
Both unpaid and paid days (0) (a) co) i)
Information not available on
type of days sos 1 1 1 1
Not eligible for paternity
leave 2 at at 20
Not eligible for parental leave ..... 59 55 59 6

+ Parental teave includes plans providing maternity leave only, paternity leave only,
and both maternity and paternity leave.
® Less than 0.5 percent.

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

16



Tabie 5, Paid rest tim
minutes of paid rest
1989

Percent of full-time employees by
1¢ per day, medium and large firms,

Profes-
sional | Techni Produc:
and |cal a
Minutes per day sovees| admin-| clerical) 2nd
Ployees istrative employ-| sonice
empoy.| ees [mplOy
ees
Total .. 100 | 100 } 100 } 100
Provided paid rest time 7 | 87! 69] 80
Under 15 minutes 1 1 1 2
15 minutes .. 3 3 4 2
Over 15 and under 20 minutes ...| ) | | @ | ©
22 14 15 29
minutes... 2 1 1 4
40] 37| 49] 97
Over 30 and under 40 minutes 10) 10) Q 1
40 minutes 1/0 | 1
Over 40 minutes 17,0) 0 3

‘Number of minutes
available

Not provided paid rest time

* Less than 0.5 percent.

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

Table 6. Pald holidays and vacations: Average number of
days for full-time participants, medium and large firms,
1989

Profes-
sional | Techni-
Alt par-| and |cal and
Item tici- | admin- | clerical
pants [istrative] partici-
partici- | pants
pants.

92} 96] 92) B89

Produc-

Paid holidays

Paid vacation by length of servi
At 6 months ... 60) 66 | 60] 53
a1] 114 | 99 | 75

At 1 year
At years 110 | 122 | 112 | 103
At5 years 134 | 149 | 140 | 121

At 10 years 165 | 178 | 169 | 156
At 15 years 186 | 197 | 19.2 | 17.7
At 20 years 204 | 21.4 | 206 | 19.7
At 25 years 215 | 224 | 217 | 209
At 30 years* 21.9 | 228 | 220 | 21.3

* Participants are included only for the service periods for which they
receive vacations.

? 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.

|



Contents—Continued

Page
94, Provision for early receipt of vested benefits ... 104
95, Provision for postretirement survivor annuity 105

105

96. Provision for preretirement survivor annuity
97. Age and length—of-service requirements for participation ...

Defined contribution plans:
98. Retirement and capital accumulation plan coverage ..
99. Type of defined contribution plans .............
100. Combinations of defined benefit and defined contribution plans . 112

101. Cash or deferred arrangements (including salary reduction plans) .............6.0e0eee cece eeee 112

- iit
ill

Saving and thrift plans:

102. Maximum allowable employee contribution ... » 113

103. Incidence of pretax employee contributions ... + 113
104. Details of pretax employee contributions . we. 114
105. Employer matching contributions ....... » 116
106. Investment of employee and employer contributions - 117
107. Withdrawal of employer contributions . » 118
108. Method of distribution of account + 118

Selected defined contribution plans:

109. Provisions of profit-sharing plans ........ 66... cece cece eect cnet e eee ene teen e ene e tetas 118
110. Age and length-of-service requirements for participation . see 119

111. Vesting schedules - 120

Pian administration:
112. Type of plan sponsor ...... 66. cee ete eee ee eee tee eee ene nee een eet e nen Eee ete 123
113. Type of plan financing see

114. Flexible benefits plans and reimbursement accounts coverage .

+ 125

115. Reimbursement account expenses

Appendixes:
A. Technical note + 126
B. Availability of the survey’s data base .. + 135



Chart A-1 Generalized standard errors, medium and large firms, 1989

Standard error

2.8

2.4

2.0

1.6

1.2

0.8

0.4

0.0

°

Percent estimate

widened to plus and minus 1.6 standard errors, and to 95
percent if the intervals are increase d to plus and minus 2
standard errors.

Chart A-1 provides standard errors for use in evaluat-
ing the estimates in the 107 tables shown in chapters 1-8 of
this bulletin containing percentage estimates. For exam-
ple, table 1 shows that 68 percent of all employees partici-
pated in sick leave plans in 1989, Chart A—1 shows a stan-
dard error of approximately 2.0 percent for this estimate.
Thus, at the 95-percent level, the confidence interval for
this estimate is 64 percent to 72 percent (68 plus and minus
2 times 2.0 percent).

Standard errors for tables 6, 22-24, and 57 could not be
generalized into graphic representation. They are pres-
ented as tables A-2, A-3, A-4, A-5, and A-6. For exam-
ple, the first entry in table 22 shows an average of 12.5 days
of annual sick leave at 6 months of service. The standard
error for this estimate is 1.1 days.

Standard errors cannot be computed for the replace-
ment rates shown in tables 19, 71, and 85. The rates shown
in these tables are projections based on models of the plan
provisions.

Nonsampling errors also affect survey results. They can
be attributed to many sources: Inability to obtain informa-

tion about all establishments in the sample; definitional
difficulties; differences in the interpretation of questions;
inability or unwillingness of respondents to provide cor-
rect information; mistakes in recording or coding the data;
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 are made to re-
duce the nonsampling errors in recording, coding, and
processing the data. However, to the extent that the char-
acteristics of nonrespondents are not the same as those of
respondents, nonsampling errors are introduced in the de-
velopment of estimates. Because the impact of these limi-
tations on the EBS estimates is unknown, reliability mea-
surements are incomplete.

For those readers interested in further mathematical de-
tails, the next section describes how chart A-1 was derived
from 1989 survey data.

Mathematical details on estimates and generalized

129

standard errors chart

Each estimator used in the production of the tables in
this bulletin is approximately normally distributed.



Chapter 7. Defined Contribution Plans

Defined contribution plans generally specify the level of
employer contributions to a plan, but not the formula for
determining eventual benefits as in a defined benefit pen-
sion plan. Instead, individual accounts are set up for par-
ticipants, and benefits are based on amounts credited to
these accounts, plus investment earnings. Thus, although
there generally is a guarantee as to employer contribu-
tions, the risk of fluctuation in investment earnings is
borne by the employee.

In 1989, 48 percent of the full-time employees covered
by the survey participated in one defined contribution plan
or more. Fifty-six percent of the white-collar workers,
compared to 40 percent of the blue-collar workers, partic-
ipated in these plans.

Defined contribution plans may be divided into those
designed to provide retirement benefits and those intended
for capital accumulation purposes. Retirement plans, as
defined in this study, do not allow withdrawal of employer
contributions until retirement age, death, disability, sepa-
ration from service, age 59 1/2, or hardship. Capital accu-
mulation plans, on the other hand, impose less stringent
restrictions for withdrawal of employer contributions, for
example, permitting one or two withdrawals per year, or
withdrawal after 2 or 5 years of service.*?

Defined contribution retirement plans enrolled 36 per-
cent of the employees covered by the survey. Taken to-
gether with participants in defined benefit pension plans
(which, as described in chapter 6, are always for retire-
ment purposes), 81 percent of employees covered by the
survey participated in at least one retirement plan.

Participation in capital accumulation plans was not
widespread. Fourteen percent of employees were in such
plans, and for all but 1 percent, this was in addition to a
defined benefit or defined contribution retirement plan
(table 98). The combined incidence of retirement and cap-
ital accumulation plans was virtually the same as that re-
corded in the 1988 survey.

Defined contribution plans may also be classified by

39 Jt should be noted that most defined contribution plans can be used
to provide retirement income or to accumulate financial assets. Capital
accumulation plans may provide retirement income because withdraw-
als of the employer's contributions are voluntary, not mandatory. Simi-
larly, defined contribution retirement plans can be used to accumulate
assets, because these plans nearly always permit preretirement with-
drawals of the employer's contributions (for example, at age 59'/2,
upon termination of employment prior to retirement, or upon disabil-
ity). Many of these plans also permit employees to receive a lump sum,
rather than an annuity, upon retirement.

type of plan (table 99). The survey provided data on the
following types: Savings and thrift plans (with 30 percent
of employees participating); profit-sharing plans (16 per-
cent); money purchase pension plans (5 percent); em-
ployee stock ownership plans (3 percent); and stock bonus
plans (less than one-half of 1 percent). Plans that al-
lowed the purchase of company stock at below market
price (stock purchase plans), or that allowed the purchase
of stock in the future at a designated price (stock option
plans) were rare. Savings and thrift and money purchase
pension plans were more common among white-collar
workers, while profit-sharing plans were more common
among blue-collar workers.

Thirty-eight percent of participants in defined contri-
bution retirement plans had all contributions to these
plans made by the employer. In contrast, only 15 percent
of the participants in capital accumulation plans had all
contributions made by the employer. A large majority of
capital accumulation plans were savings and thrift plans,
which involve employer matching of employee contribu-
tions.

Thirty-seven percent of participants in all retirement
and capital accumulation plans were enrolled in more than
one plan. Where more than one plan was available, the
combination was most often a defined benefit pension plan
and a savings and thrift plan. In fact, the majority of par-
ticipants in savings and thrift plans also participated in
other plans. This was less likely to be true of participants
in profit-sharing and money purchase pension plans (table
100).

Cash or deferred arrangements

Plans with a cash or deferred arrangement enrolled 41
percent of the employees within the scope of the survey, up
from 36 percent in 1988 (table 101). These arrange-
ments, also known as 401(k) plans, allow participants to

40 A money purchase pension plan provides for a pension annuity or
other form of retirement income that is determined by fixed contribu-
tion rates plus earnings credited to the employee’s account. A stock bo-
nus plan is a plan whereby the employer or the employee and the em-
ployer jointly contribute to a trust fund that invests in various securi-
ties, Employee stock ownership plans are generally wholly employer
financed, and are designed to distribute company stock periodically to
employees. Savings and thrift and profit sharing plans are described lat-
er in this chapter.

41 For freestanding 401 (k) plans, participants were those workers ac-
tually making pretax contributions. For other plans, participants were
those workers in plans offering cash or deferred arrangements, whether
or not workers actually made pretax contributions.

107


Table 58. Health care benefits: Percent of full-time
participants by length-of-service requirements for participa-
tion,’ medium and large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and
adminis-| clerical | service
trative | partici- | partici.
partici- | pants | pants
pants

Alt par-

Length-of-service requirement | icicants

Total 400 | 100 | 100 | 100
With service requirement 49 38 45 58
MONTH sare 13 13 12 13

2 months 7 4 3 11

3 months 7 13 19 18
4-5 months 1 1 2 4

6 months 8 6 7 10
7-41 months .. 2 1 1 3

4 year. 1 1 a) 1

Without service requirement

Service requirement not
determinable snr

* 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 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. Minimum age requirements are
rare.

* Less than 0.5 percent.

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

Table 59. Medical care benefits': Percent of full-time
participants by provision for coverage after retirement,
medium and large firms, 1989

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

All par-

Provision ticipants

pants
Total 100 | 100 | 100 | 100
With employer-tinanced retiree
coverage’ .. 42 a7 40 40
For retirees under age 65 only 7 7 5 8
For retirees 65 and over only ...| 2 3 2 2
For all retirees .. 33 38 33 29
Benefits cancelled on retirement or
financed wholly by retiree | 87 52 58 58
Data not available .. 1 1 1 2

* Plans providing services or payments for services rendered in the
hospital or by a physician. Excludes plans that provided only dental, vi-
sion, or prescription drug coverage.

® ‘Includes plans financed wholly by employers and plans financed
jointly by employers and employees.

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

66



through their retirement plan; 29 percent of all employees
covered by the survey (35 percent of the blue-collar work-
ers) had immediate disability retirement provisions.

Nearly half (48 percent) of the full-time participants
had to wait 6 months after the disability occurred before
beginning to receive LTD payments. For other partici-
pants, LTD benefits commenced after sick leave and sick-
ness and accident insurance benefits ended.

Eighty-six percent of all participants received their LTD
benefit as a fixed percent of predisability earnings. The
most common benefit percentages were 50 and 60 percent
of monthly pay. Most of these plans set a limit on maxi-
mum monthly payments. These maximums commonly
ranged between $4,001 and $10,000; the average was
$5,627.

Slightly over 90 percent of the white-collar participants
were in plans that provided a fixed percent of earnings; 71
percent of blue-collar workers were in such plans. Blue—
collar participants in plans with other benefit formulas
were more likely to be covered by plans paying a scheduled
dollar amount that varied by the level of the worker’s earn-
ings. In contrast, white-collar workers not covered by a
plan paying a fixed percentage of earnings were most likely
to be covered by a plan that paid a variable percentage
based on the level of earnings.

Eighty—three percent of participants were in LTD plans

21

that applied a monthly maximum limit, either a dollar
maximum in plans that pay a fixed percent of earnings (41
percent), a disability income ceiling (15 percent), or a
combination of both methods (28 percent). Disability in-
come ceilings affect benefits only if the amount payable
from the LTD plan plus income from other outside sources,
such as rehabilitative employment and family Social Secu-
rity payments, exceeded a specified percentage (most com-
monly 70 or 75 percent) of predisability earnings.

Survivor benefits, payable to an eligible dependent upon
the death of a disabled employee, were available in plans
covering 28 percent of the LTD participants. These bene-
fits usually took the form of a lump-sum payment (most
often equal to 3 times the monthly LTD benefit) or a per-
centage of the monthly LTD benefit paid for a fixed number
of months (generally not more than 6 months).

Plans that included coverage for disabilities due to men-
tal illness covered 94 percent of long-term disability plans
participants. However, 44 percent had limits placed upon
coverage. In most of these cases, benefits were provided
for a specified period (usually 24 months) and then ceased
unless the participant was institutionalized at the end of
the limiting period. For 3 percent of the participants,
benefits were provided for a only a set period of time, re-
gardless of institutionalization.



Defined benefit pension plans

For participants in these traditional retirement plans:

76 percent of participants were in plans with formulas
based on earnings, most frequently on earnings during
5 consecutive years of employment;

Benefit formulas were integrated with Social Security
benefits in plans affecting 63 percent of participants;

White-collar participants more commonly were cov-
ered by plans with earnings—based formulas, and
more commonly had benefits coordinated with Social
Security;

Common eligibility requirements for a normal, or un-
reduced, pension were: Age 65 with no specified
length of service, age 62 with 10 years of service, and
30 years of service with no age requirement;

68 percent of covered workers could retire with a re-
duced pension at age 55, most commonly after 10
years of service;

22 percent of covered workers were in plans that had
granted one postretirement increase or more to retir-
ees during the previous 5 years;

17 percent of participants were in plans that had ex-
tended one special early retirement offer or more to
eligible workers during the previous 5 years.

Defined contribution plans

The most frequently observed type of defined contribu-
tion plan was a savings and thrift plan. For participants in
these plans:

92 percent were required or allowed to contribute
funds on a pretax basis, deferring income taxes until
funds are received from the plan;

The typical employer matching rate was 50 percent,
and generally applied to the first 6 percent of earnings
saved by the employee.

Flexible benefits plans and reimbursement
accounts

Flexible benefits plans typically provided choices
among medical and dental care plans, life insurance
amounts, and the option of receiving cash in lieu of
benefits;

Reimbursement accounts most frequently provided
funds for medical expenses and dependent care.



Postage and Fees Paid

U.S. Department of Labor
U.S. Department of Labor

Bureau of Labor Statistics

Washington, D.C. 20212
Third Class Mail

Official Business

Penalty for Private Use, $300 Lab-441



Table 22. Paid sick leave: Average number of days at full
pay for full-time participants by type of plan, medium and

large firms, 1989

Profes-
sional | Techni- | Produc-
and | cal and | tion and
Item taoents [adminis-| clerical | service
trative | partici- | partici-
partici- | pants | pants
pants
Paid annual sick leave' by length of
service:
At 6 months 12.5 17.9 10.8 7.2
At 1 year 15.4 218 14.5 9.4
At 3 years 17.8 25.2 16.7 10.9
At 5 years 20.5 29.3 19.2 12.6
At 10 years .. 25.0 35.8 23.8 14.8
At 15 years .. 26.6 38.0 25.2 16.1
At 20 years .. 27.8 39.6 26.2 16.8
At 25 years 28.3 40.5 26.6 17.3
At 30 years? 28.6 40.8 268 17.4
Paid per disability sick leave? by
length of service:
At 6 months 39.4 45.5 31.2 33.9
At 1 year .. 43.4 50.4 34.3 38.3
At3 years 50.2 58.0 AT 44.5
AUS years 66.1 13 59.2 64.3
‘At 10 years .. 82.8 89.2 76.2 78.9
At 15 years .. 97.4 100.3 91.4 101.1
At 20 years .. 108.9 108.8 101.7 121.8
‘At 25 years 118.9 115.4 4144 140.9
At 30 years’ . 119.3 115.8 111.4 141.6

* Employees earn a specified number of sick leave days per year. This
number may vary by length of service.
? ‘The average (mean) was virtually the same after longer years of serv-

ice.

3 Employees earn a specified number of sick leave days for each ill-
ness or 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.

26



Table 84. Defined benefit pension plans:' Percent of full-time participants by maximum benefit provisions,” medium and large

firms, 1989

‘Type of benefit formula?

Maximum benefit provision Terminal] Career | Dollar

Type of benefit formula®

Maximum benefit provision -
Tota [Terminal) Career | Dollar

earnings |earnings| amount

Total | carnings| eamings| amount
All participants

Total ... 100 | 100 | 100 | 100
Subject to maximum 41 55 4 25
Limit on years of credited service...) 37 50 4 20
Less than 20 1 1 - 1
20. 1 1 - iv)
4 6 - 2
13 7 1 9

1 1 1 -
10 14 2 4

iv) iy) - -
W 1 4

iV) 1] - -

0 i) - -
6 8 - 5

Not subject to maximum ..

Professional and administrative
Total

‘Subject to maximum .. 44 54 4 25
Limit on years of credited service 42 53 4 at
Less than 20 .. 1 1 - 1

iv) 1 - (a)
5 6 - 3

14 16 2 "1

1 1 1 -
13 16 1 3

iV) 1 - -
10 13 1 3

© i) - -

4 iv) iv) - -
Other maximum’ .. 5 5 - 4
Not subject to maximum . 56 46 96 75

Technical and clerical

Total 100 | 100 | 100
[Subject to maximum .. 49 60 4 32
Limit on years of credited service...) 47 58 4 28
Less than 20 . 1 1 - 1
20. iv) a - )
15 16 1 18
1 1 1 -
12 15 1 3
iy) iy) - -
14 18 1 1
i) iv] - -
0) © - -
5 - 3
Not subject to maximum st 40 96 68

Production and service

Total 100 100 100 100
[Subject to maximum 35 53 4 22
Limit on years of cre 28 42 4 7
Less than 20 1 1 - oO

20 1 1 - 0

3 S V)
11 18 e) 5

0) 1 o) -
8 10 3 5

iv) iv) = -
5 6 () 5

© is) - -

0) 1 - -
8 12 - 5
INot subject to maximum 65 47 96 78

* Excludes supplemental pension plans.

? These maximum provisions are independent of Internal Revenue
Code esilings on pensions payable from defined benefit plans.

* if a plan contained more than one benefit formula based on terminal
earnings, career earnings, or dollar amounts, each formula containing a
maximum benefit provision was tabulated. Participants were included as
under formulas without maximum benefit provisions only if none of the for-
mulas contained a maximum.

* Includes plans with benefit formulas based on a percent of employee
‘or employer contributions and cash account plans.

® Less than 0.5 percent.

° ‘The benefit yielded under the formula is limited to a percent of termi-
nal earings, sometimes coordinated with primary Social Security pay-
‘ments, or to a flat dollar amount.

NOTE: Sums of individual ites may not equal totals because more
than one benefit formula within a plan may have a maximum benefit provi-
sion. Also, some benefit formulas contain a limit on years of credited
service and another maximum provision. Where applicable, dash indicates
no employees in this category.

95



Bureau of Labor Statistics

Regional Offices

AMERICAN SAMA

Region |
Kennedy Federal Building
Suite 1603
Boston, MA 02203
Phone: (617) 565-2327

Region Il
Room 808
201 Varick Street
New York, NY 10014
Phone: (212) 337-2400

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

Region IV
1371 Peachtree Street, N.E.
Atlanta, GA 30367
Phone: (404) 347-4416

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

Region VI
Federal Building
525 Griffin Street, Room 221
Dallas, TX 75202
Phone: (214) 767-6970

Regions Vil and VIII
911 Walnut Street
Kansas City, MO 64106
Phone: (816) 426-2481

Regions IX and X
71 Stevenson Street

P.O. Box 193766
San Francisco, CA 94119
Phone: (415) 744-6600



Table 77. Defined benefit pension plans:' Percent of |
full-time participants by method of determining retirement |
payments, medium and large firms, 1989 |

Protes-
sional | Techni- | Produc-
; All par. |. 29d_| cal and | tion and
Basis of payment? ticipants |20minis-| clerical | service
ip trative | partici- | partici- i
partici- | pants | pants
pants
Total .. 100 | 100 | 100 | 100
Terminal earnings formula 64 7 76 st
No alternative formula .. 35 42 48 25
Terminal earnings alter: 10 "1 9 10
Career earnings alternative a 4 4 2
Dollar amount alternative? 7 20 18 14
Percent of contributions
alternative ..... 0) “ ) -
Career earnings formula a) 15 10 10
No alternative formula . 6 8 7 4
Career earnings alternative ... 0) rv) 0) 1
Dollar amount alternative’... 5 7 3 5
Dollar amount formula? 22 6 "1 37
No alternative formu 19 5 9 32
Dollar amount alternative’ 2 1 2 3
Percent of contributions
alternative 1 1) 0) 1
Percent of contributions formula .. 1 (7) 1) 2
Cash account 2 2 a 1
* Excludes supplemental pension plans.
2 Alternative formulas are generally designed to provide a minimum
benefit for employees with short service or low earnings.
*® Includes formulas based on dollar amounts for each year of service
and flat monthly benefit varying by service.
* Less than 0.5 percent.

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

88


Chapter 3. Work Schedules, Paid Time Off,

and Parental Leave

Time off with pay is available to employees in several
different forms—from daily rest periods to annual vaca-
tions of several weeks. In 1989, survey coverage of paid
leave benefits included provisions for lunch and rest peri-
ods; holidays and vacations; and personal, funeral, jury—
duty, and military leave. Paid and unpaid maternity and
paternity leave was also surveyed. (Information on paid
sick leave appears in chapter 4.)

Work schedules

Weekly work schedules of 40 hours applied to 82 per-
cent of the full-time employees covered by the survey
(table 3). Fifteen percent of the professional-administra-
tive employees, 17 percent of the technical—clerical em-
ployees, and 4 percent of the production-service em-
ployees worked 35 or 37.5 hours a week (7— or 7.5-hour
days). Four percent of the work force was scheduled to
work other than a 5-day week.

For the first time, the survey included information on
flexible work schedules. Eleven percent of workers stud-
ied had formal flexible work arrangements, giving em-
ployees the opportunity to begin and end work within a
range of hours. Limits on the amount of flexibility vary
from plan to plan, but generally employees must be at
work for a core of hours during midday. Fifteen percent of
white-collar workers had flexible work schedules avail-
able to them, more than double the coverage for blue-col-
lar workers.

Paid lunch and rest periods

Formal paid lunch periods were provided to 10 percent
of the employees, and 71 percent were provided formal
rest time, such as coffee breaks and cleanup time (tables 4
and 5). Both benefits were more common among produc-
tion -service employees than among the two other occupa-
tional groups.

Blue—collar employees who were covered by paid lunch
period plans (16 percent) usually received 20 or 30 min-
utes a day, averaging 24 minutes. The 4 percent of white—
collar workers eligible averaged 35 minutes of paid lunch
time each day. Paid rest time, averaging 26 minutes a day
(as shown in the following tabulation), was provided most
commonly as two daily breaks of 10 or 15 minutes each.

Professional
All and Technical Production
partici admini- and and
pants trative clerical _—_service

Lunch time—average

minutes per day .. . 26 35 34 24
Rest time—average
minutes per day ....... 26 26 7 26

Paid holidays

Paid holidays, averaging 9.2 days per year, were pro-
vided.to 97 percent of full-time employees. Extended holi-
day plans, such as the Christmas—New Year’s Day period
provided in the auto industry, floating holidays, and “per-
sonal holidays,” such as employee birthdays, were in-
cluded in the holiday plans reported (tables 6 to 8).

When a holiday fell on a scheduled day off, such as a
Saturday or Sunday, another day off was regularly granted
to 84 percent of the employees. Most of the remaining
workers received either another day off or an additional
day’s pay, depending on when the holiday fell.

Paid vacations

Paid vacations were provided to 97 percent of em-
ployees (tables 6 and 9 to 11). Vacation pay provisions for
these employees averaged 9.1 days at 1 year of service, 16.5
days at 10 years, 20.4 days at 20 years, and 21.9 days at 30
years. Plans covering white-collar employees generally
provided more vacation days than those for blue-collar
employees. Sixty-five percent of the white-collar em-
ployees, for example, became eligible for at least 15 days of
vacation at 5 years of service; this compared with 34 per-
cent of the blue-collar employees. In cases where holi-
days, vacation, sick leave days, or personal leave are com-
bined under one leave category and could not: be shown
separately, it was reported as vacation time. These consol-
idated leave plans or “leave banks” have been adopted by a
number of establishments, most notably those that must
always remain open, such as hospitals.

Nearly all white-collar employees received their regular
salaries or earnings during vacation periods. Nine-tenths
of the blue-collar employees also received such vacation
pay; virtually all of the others were provided vacation pay-
ments based on a percentage of annual earnings. Anni-
versary—year bonus vacation days, such as an extra week



Table 83. Defined benefit pension plans:' Percent of full-
Security benefit, medium and large firms, 1989

ime participants by provision for integration of pension with Social

Type of benefit formula?

Provision Terminal] Career | Dollar

Total’ | earnings|earnings| amount

Type of benefit formula*

Provision ‘Terminal| Career | Dollar

°
Tota? | eamings|eamings| amount

All participants
Total .

With integrated formula

Offset by Social Security

payment? 4 62 7 )
Based on service’ 32 49 3 -
Not based on service’ 9 13 4 °
Dollar amount ) 1 ’ -
Percent of payment .. 9 12 4 (a)

Pure excess® ) (9) -

x

BS

i

8

g

Ba
'

Step-rate excess? ...
Integrated with a Social Security|

breakpoint... 15 16 at -
Integrated with a specific dollar
breakpoint ... | 10 "1 23 -

Without integrated formula 37 14 38 | 100

Professional and administrative

Total ... 400 | 100 | 100 100

With integrated formula .. 78 89 60 (¥)

Offset by Social Security

payment ... 48 61 7 0
Based on service’ 38 49 3 -
Not based on service’ 10 2 4 )

Dollar amount vy - o) -
Percent of payment 10 12 3 0
Pure excess® 1 to) 2 -
Step-rate excess? .. 32 30 52 -
integrated with a Social Security
breakpoint | 20 19 at -
Integrated with a specific dollar
breakpoint seveee 18 " 24 -
Without integrated formula 22 " 49 | 100

Technical and clerical

Total 100 | 100 | 100
With integrated formula 75 90 64 is)
Offset by Social Security

payment 61 66 7 ie)
Based on service” 39 52 2 -

Not based on service’ 11 14 5 0

Dollar amount . iy) 19) 1) -

Percent of payment "1 14 iv)

Pure excess*
Step-rate excess”
Integrated with
breakpoint | 18 7 30 -
Integrated with a specific dollar
breakpoint | 14 10 24 -

25 10 36 | 100

|Without integrated formula ..

Production and service

Total 100 | 100 } 100

With integrated formula 47 80 62 0

Oftset by Social Security

payment® 31 59 7 0
Based on service® 24 a7 3 ~
Not based on service’ 7 12 4 0

Dollar amount 1 2 0 ~

Percent of payment 6 10 3 )

Pure excess! iy) = 3 -

Step-rate excess® 17 23 52 -
Integrated with a Social Security|

breakpoint 10 12 32 -
Integrated with a specific dollar

cS
g
'

breakpoint

jthout integrated formula .. 53 20 38 | 100

Excludes supplemental pension plans.

2 If a plan contained more than one benefit formula based on terminal
‘earnings, career earnings, or dollar amounts, each integrated formula was
tabulated. Participants were included as under nonintegrated formulas
only if none of the formulas was integrated.

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

* Less than 0.5 percent.

5 Benefit as calculated by formula is reduced by portion of primary So-
cial Security payments.

© Offset is equal to the product of a percent of primary Social Security
payments and the participant's years of service with the employer. A maxi-

mum offset is frequently applied, for example, 50 percent.

? Benefit formula includes a reduction by a specified percent of primary
Social Security payments or a specific dollar amount.

* Formula does not apply to earnings subject to FICA (Social Security)
taxes or below a specific dollar breakpoint.

* Formula applies lower benefit rate to earings subject to FICA (Social
Security) taxes or below a specific dollar breakpoint.

NOTE: Sums of individual items may not equal totals either because of

rounding or because more than one benefit formula within a plan was inte-
Grated. Where applicable, dash indicates no employees in this category.

94



Table 87. Defined benefit pension plans:' Percent of full-time participants by minimum age and associated service
requirements for early retirement,’ medium and large firms, 1989

Profes-

Profes-

a sional Teenrical ray sional [Technical] FrOWUe,
i i WI par- | and ad- |and cleri- All par- | and ad- and cleri-| "0" @
‘Age and service requirement’ | fcipante | minista- | cal par service || Ago and service requirement’ | dcipants | ministta | cal pare service
tive par-| ticipants | Parr tive par- | ticipants | Parmer
ticipants bar ticipants Pants
Total 100 | 100 | 100 100
‘Age 56-59 1 1 1 0
Participants in plans permitting 5 years’ service i) 0 .
early retirement 97 97 98 96 10 years’ service 0) 0} 0) 0
15 years’ service 1 ro) .
No age requirement 6 7 3 7 20 years’ service io) ) 0) “
Fewer than 30 years’ 30 years’ service ) 1 1 )
service .. oO iv) i) i
30 years’ service 6 3 6 || Age 60 .. 6 3 3 9
More than 30 years’ No service requirement ) 0) ro) 0
service .. rv) iv) “) v) 10 years’ service 4 1 1 7
11-14 years' service .. iV) 1)
Less than age 65 10 8 13 10 15 years’ service 1 1 1
No service requirement 0 ) to) ) 20 years’ service “ Oy 0)
Less than 20 years’ 30 years’ service O) 0 6 -
service .. 6 8 8 6
20 or more y‘ 3 1 4 4 || Age ee... 2 (9) 1 4
No service requirement ) 1 “
Age 55 . 68 72 74 62 10 years’ service .. 2 4 1 4
No service requirement 6 8 5 6
1-4 years’ service iv) iv] 0 iv) ‘Sum of age plus service® 4 5 4 4
5 years’ service .. 9 12 11 Equals 70 or fewer 1 2 2 1
6-9 years’ service iv) 0 0) - Equals 75 1 1 1 1
10 years’ service 43 42 46 42 Equals 76-79 ) ¢) “ ”
11-14 years’ service .. iv) iv) (a) ) Equals 80 1 1 1
15 years’ service 8 8 9 7 Equals 85 0) 1 0) oO)
20 years’ service 1 1 1 1 Equals 90 or more 0) 0) i) to)
25 years’ service iV) 1 1 -
Participants in plans without early
retirement .. 3 3 2 4

* Excludes supplemental pension plans.
* Early retirement is defined as the point at which a worker could re-
tire and immediately receive accrued benefits based on service and

earnings but reduced for each year prior to normal retirement age.

2 if a plan had alternative age and service requirements, the earliest
age and associated service were tabulated; if one altemative did not
specify an age, it was the requirement tabulated.

* Less than 0.5 percent.

* In most plans, participants must also satisty a minimum age or serv-

ice requirement.

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



Table 104. Savings and thrift plans: Percent of full-time participants in plans that allow pretax employee contributions by
method of determining contribution, medium and large firms, 1989—Continued

Initial contributions

Inia conoutions must be pretax; | Initial contributions
. must be pretax; additional may be either pretax
Item! Total all comurene must additional contributions may be oF posttax
contributions must be | either pretax or | at the employee's
post posttax, at the option
‘employee's option
Technical and clerical
Total 100 37 8 4 51
Maximum contributions allowed
Less than 5 percent 3 1 ® - 1
5 percent ro) @ ie) - i)
6 percent 10 3 4 - 4
7 percent 19) - i) - -
8 percent 5 2 ro) - 2
9 percent 1 i - - -
10 percent . 15 8 2 1 4
11 percent .. 1 iv) - - 1
41.01-11.99 precent Q tc) - - -
12 percent .. 15 6 1 1 6
12.01-12.99 percent 1 1 - - 6
43 percent .. 4 1 - 1 2
14 percent .. 2 1 - - 7
15 percent .. 15 6 o) 19) 10
16 percent .. 18 4 - al 14
Greater than 16 percent 7 1 - 1 3
Specified dollar amount 1 1 - - (cl
Internal Revenue Code fi 1 1 - - -
Production and service
Total . 100 35 7 4 53
Maximum contributions allowed:
Less than 5 percent 2 1 a) - 1
5 percent 3 2 @ - 1
6 percent 5 3 1 - ®
7 percent 1 - 1 - -
8 percent 2 1 - - 1
9 percent (¢) fo) - - -
10 percent .. 22 7 4 3 9
11 percent .. 19) iy) - - 1)
12 percent .. 13 5 1 - 7
12.01-12,99 percent 1 @ - - 1
13 percent .. 1 ea - - 1
14 percent . 2 ©} - - 2
15 percent . 14 4 a) o) 10
16 percent . 20 7 - 1 12
Greater than 16 percent 10 3 - 1 6
Specified dollar amount . 3 1 - - 2
Internal Revenue Code limit .. 2 2 - - 2

* If maximum contributions varied by participant's length-of-service,
age, or both, the highest possible percentage was tabulated.

? Less than 0.5 percent.

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

totals. Where applicable, dash indicates no employees in this category.

115



Table 54. Medical care benefits: Percent of full

selected benefits, medium and large firms, 1989

ime participants in plans with vision benefits by extent of coverage for

Subject to internal limits Subject to
et, Covered overall Not cov- | Not deter-
Type of vision benefit Total | Covered | “in tull | sopqi Scheduled] Coinsur- | Copay- | Retail dis-)timitations | ered | minable
allowance| ance ment count® only
All participants
Examinations 100 97 28 63 33 3 30 - 8 3 -
Eyeglasses . 100 68 9 58 39 2 14 5 1 31
Contact tenses* 100 66 4 60 44 8 9 4 1 34 iv)
Professional and administra-
tive

Examinations 100 96 31 60 29 4 30 - 6 4 -
Eyeglasses .. 100 63 8 52 36 3 rT 6 2 36 1
Contact lenses 100 61 6 53 40 10 5 5 2 38 1

Technical and clericat
Examinations 100 92 25 63 30 2 33 - 5 8 -
Eyeglasses 400 62 7 54 36 2 12 6 1 36
Contact lenses 100 64 5 58 39 10 8 6 2 36 )

Production and service
Examinations 100 99 29 86 37 2 28 - 5 1 -
Eyeglasses 100 1 10 63 42 2 18 4 1 26 “
Contact lenses 100 69 3 85 49 5 13 3 0 30 6

' The total is fess than the sum of the individual items because workers

may participate in plans with more than one type of limitation.
? Provided at discount if purchased at an approved dealer.

3 Includes plans where coverage was subject to special conditions, for

example, following cataract surgery.

* Less than 0.5 percent.

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

tals. Where applicable, dash indicates no employees in this category.

62



Table 61. Medical care benefits: Percent of full-time
participants by provision for employer-financed coverage
during layoff, medium and large firms, 1989

Profes-
sional | Techni- | Produc-
Allpar.|_ 29 | cal and | tion and
Benefit provision fieiponts |2dminis-| clerical | service
Pe trative | partici- | partici-
partici- | pants | pants
pants
Total too | 100 | 100
With employer-financed coverage’ ...) 22 at 18 24
Employee share of cost?
Partial cost 7 8 6 7
No cost 13 10 4 15
Cost not determinable 2 2 1 2
Duration of coverage:*
1-2 months 3 3 2 a
3 months 4 4 4 5
45 months 1 1 1 1
6 months 2 2 2 2
7-14 months i) i) iv iv)
3 3 2 4
2 1 1 3
1 1 1 1
Until rehire 1 1 1 1
Not determinable 4 5 4 3
Without employer-financed coverage 76 7 80 74
No policy established ..... ) 0 iy) o
2 2 2 1

Layoff policy not determinable .

* Plans providing services or payments for services rendered in the
hospital or by a physician. Excludes plans that provided only dental, vi-

sion, or prescription drug coverage.

2 ‘Administrative costs were excluded from the tabulations.

* Provision applies to the continuation of employee coverage immedi-
ately upon layoff. In some plans, group coverage was extended beyond
the length-of-continuation periods reported, but was financed solely by the

laid-off employee.
* Less than 0.5 percent.

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

tals. Where applicable, dash indicates no employees in this category.

68



Table 9. Paid vacations: Percent of full-time employees by amount of pald vacation provided at selected periods of
service, medium and large firms, 1989

Protes- Profes-
sional | Technical] Produc, sional |Technical) prOdue,
fon poli All em- | and ad- |and cleri- on pol All em- | and ad- |and cleri-
Vacation policy playees | ministre: | cal em- | Service Vacation policy Playees / ministra-| cal em- | Service
tive em- | ployees | "ROY tive em- | ployees | &TPIOy-
ployees ployees ees
Total... 100 100 100 100
At 5 years of
Provided paid vacations’ 97 98 99 95 service—Continued
40 25 33 53
At 6 months of service:
Under 5 days . 6 4 4 9 5 5 4 5
5 days .. 34 at 43 26 4 50 50 30
Over § and under 10 days 9 16 14 3
10 days .... er! 7 7 1 2 2 2 1
Over 10 and under 15 5 3 6 1
days 1 2 2 1
15 days 1 2 i] is) 1 2 1 1
Over 15 days .. 1 2 () 1 1 2 fe}
2 3 2 1
At 1 year of service:
Under 5 days . 1 ) ) 1
5 days. “| 8t 10 7 51 i) to) iG) a)
‘Over § and under 10 days 1 1 1 1 a) ic) 0) 1
10 days 52 64 69 96 io) - 19) 6
Over 10 and under 16 10 days .. 6 2 5 9
days 3 5 5 1 Over 10 and under 15
15 days 4 10 3 1 1 () (a) 1
87 50 87 61
1 1 1 @
1 4 1 (a) 6 4 5 7
Over 20 and under 25 a4 32 24 13
days 1 2 1 1
25 days and over 1 1 1 i) days 2 3 2 1
25 days .. 4 2 2 )
At 2 years of servi Over-25 days 3 4 3 2
Under § days (a) 0 is) a
5 days .. 3 i) 2 5 At 15 years of service:
Over 5 ar 1 te) to) 2 Under 5 days ®Q @ @ @
10 days 73 65 76 76 5 days QO eQ e& 1
Over 10 and under 15 Over 5 and under 10 days ¢) - fe) ol
days 6 6 5 6 10 days ... 4 2 3
15 days 8 18 9 3 Over 10 and under 15
Over 15 and under 20 days .. eQ e) al rol
1 2 1 1 15 days a7 19 23 33
20 days 2 6 3 i) Over 16 and under 20
Over 20 and under 25 4 3 3 5
. 1 2 2 1 53 61 59 45
1 2 1 0)
3 4 3 2
At 5 years of 3 5 3 2
service: Over 25 and under 30
Under 5 days 0 ® Q@ 0 days .. 2 2 3 1
5 days .. 1 ° ra) 2 30 days (a) 1 1 i)
Over 5 and under 10 days] (") @ @ (7) Over 30 days 1 2 2 1



Table 85. Defined benefit pension plans:' Average replacement rates for specified final earnings and years of service,’
medium and large firms, 1989

Years of service”

Final annual earnings

10 15 20 25 30 35 40

Private pension only i

All participants i

124 17.6 23.4 29.0 34.6 39.5 44.0
10.9 15.9 24.1 262 31.3 35.7 39.8
10.4 15.1 20.0 249 29.7 33.9 97.7
9.9 148 19.8 248 29.4 33.3 36.7
98 14.9 19.9 25.0 29.5 33.3 36.6
10.0 15.1 20.2 25.3 29.8 33.4 36.5
Professional and
administrative
$15,000 114 16.5 217 26.9 32.2 36.5 40.4
$20,000 10.8 15.5 20.6 25.5 30.4 34.6 38.3 i
$25,000 10.6 15.2 20.0 25.0 29.9 34.0 37.5 |
$35,000 10.6 15.7 21.0 26.3 31.1 95.1 38.5
$45,000 10.9 16.4 21.9 274 32.3 36.3 39.7
$55,000 11.3 74 228 28.4 33.3 97.2 40.4
Technical and
clerical
$15,000 11.6 168 22.2 27.5 32.9 37.4 ANS
$20,000 10.9 15.7 20.9 26.1 31.1 35.5 99.4
$25,000 10.6 15.4 20.5 25.8 30.8 35.0 38.6
$35,000 10.6 15.9 214 27.0 32.0 36.2 99.6
$45,000 10.8 16.5 22.2 28.0 33.1 37.2 40.6
$55,000 11.3 174 22.9 28.9 34.0 37.9 41.2
Production and service
128 18.8 25.1 31.0 36.9 42.4 475
14.0 16.2 216 26.7 318 36.5 40.8
10.1 14.8 19.7 24.5 20.1 33.4 37.3
9.1 13.6 18.2 22.7 26.9 30.7 34.1
87 13.4 175 21.9 26.0 205 92.6
$55,000 86 129 173 21.6 255 28.8 318

Combined private pension and primary‘ Social Security benefit

All participants
56.9 624 68.2 73.8 79.4 84.3 88.8
52.0 56.9 62.2 67.3 72.3 768 80.8
48.7 53.4 58.3 63.3 68.0 723 76.0
39.5 44.4 49.4 54.4 59.0 629 66.3
33.8 38.8 43.9 48.9 53.5 573 60.5
29.6 34.7 39.8 44.9 49.4 53.0 56.1
56.2 613 66.5 71.7 77.0 81.3 85.3
51.9 56.6 61.6 66.5 715 75.7 79.4
48.9 53.5 58.3 63.3 68.2 72.3 75.8
40.2 45.4 50.6 55.9 60.7 64.7 68.1
34.8 40.4 45.9 51.3 56.2 60.3 63.6
31.0 96.7 42.4 48.0 52.9 56.8 60.0

Technical and

clerical

56.4 616 67.0 723 727 82.2 86.3
519 56.8 62.0 672 722 766 80.4
48.9 53.7 58.8 644 601 73.3 769
40.2 45.5 51.0 56.7 617 65.8 69.3
34.8 40.4 46.2 52.0 57.1 61.2 64.6 i
30.9 36.7 426 48.5 53.6 57.5 608 |

See footnotes at end of table.


Chapter 4. Disability Benefits

This chapter discusses three types of disability benefits:
Sick leave, sickness and accident insurance, and long—
term disability insurance. Paid sick leave and sickness and
accident insurance provide workers protection against
loss of income during temporary absences from work due
to illness or accident. During more extended periods of
disability, workers’ income may be continued through
long-term disability insurance or disability pensions.

Overview

Short-term disability protection through sick leave,
sickness and accident insurance, or both, was provided to
89 percent of all employees in the survey in 1989. (See
chart 1.) Sick leave usually provides 100 percent of the
worker’s normal earnings, whereas sickness and accident
insurance usually replaces 50 to 67 percent of pay.

Twenty-two percent of the workers had sick leave plans
coordinated with sickness and accident insurance. Coor-
dination can take two forms: Starting insurance benefits
after sick leave pay has ended, or paying both benefits con-
currently. When payments are made from both sources,
sick leave pay is reduced by the amount of the insurance
benefits so that the total benefit does not exceed full salary.

Regardless of the method of coordination, employers
offering sickness and accident insurance tend to allow few-
er sick leave days than those without such insurance. At 5
years of service, for example, annual sick leave plans coor-
dinated with insurance granted an average of 13.4 days at
full pay. Plans not coordinated with insurance provided
24.5 days. This gap widened as years of service increased.

The Employee Benefits Survey gathers data on the num-
ber of days available for short-term disability, which in-
cludes both sick leave and sickness and accident insur-
ance.® For example, employees with 5 years of service had
available an average of 106 days (at full or partial pay) of
short-term disability benefits (table 19).

Long-term disability insurance (LTD), which typically
pays 50 or 60 percent of earnings, was provided to 45 per-
cent of employees. Twenty-nine percent (some with LTD
iusnzance) were eligible for immediate disability benefits
under their pension plans.

LTD insurance payments usually begin after 6 months of
disability and continue to retirement age or for a specified

8 For further analysis of combined sick leave and sickness and accident
insurance plan provisions, see James N. Houff and William J.
Wiatrowski, “Analyzing Short-term Disability Benefits, “Monthly La-
bor Review, Sune 1989, pp. 3-9.

number of months, depending on the worker’s age at the
time of disability. Career—-ending disabilities may entitle
an employee to an immediate pension, or the pension may
be deferred until other forms of income, such as LTD insur-
ance, have ceased. (Disability provisions of pension plans
are discussed in chapter 6.)

Paid sick leave and LTD insurance were more prevalent
among white-collar workers, while sickness and accident
insurance and immediate disability pension benefits were
more prevalent among blue-collar workers.

Paid sick leave

Of the employees covered by paid sick leave plans, 75
percent were allowed a fixed number of days per year (an-
nual sick leave plans). Another 13 percent of the partici-
pants were provided sick leave benefits for each illness (per
disability plans). Most of the remainder were covered by
both annual and per disability benefits. Four percent re-
ceived time off as needed (tables 18, 20 to 25).

Forty-nine percent of the employees covered by annual
sick leave plans were allowed to carry over and accumu-
late unused sick leave from year to year (cumulative
plans). Such plans typically granted fewer days per year
than plans in which employees could not carry over un-
used days. For example, at 20 years of service, cumulative
annual plans averaged 13.7 days at full pay, while noncu-
mulative plans averaged 41.2 days. Two-thirds of the em-
ployees in cumulative plans had limits on the amount of
sick leave that could be carried over to the next year, typi-
cally between 30 and 130 days. The remaining workers in
cumulative plans were allowed to accumulate an unlimit-
ed amount of sick leave. Ten percent of employees in an-
nual sick leave plans could cash in accumulated sick leave
at termination of employment or use that leave to enhance
retirement benefits.

Per disability sick leave plans generally provided more
days of paid leave for an illness than annual plans. For
workers with per disability plans, the average number of
days at full pay was 43.4 at 1 year of service, 66.1 at 5 years
of service, 97.4 at 15 years of service, and 118.9 at 25 years
of service. Under annual plans, corresponding averages
were 15.4 days at 1 year, 20.5 days at 5 years, 26.6 days at
at 15 years, and 28.3 at 25 years.

Partial_pay benefits to be paid after full-pay benefits
ended were available to 12 percent of sick leave partici-
pants with 10 years of service. In some of these plans, the
number of days with full-pay benefits increased with se-



Accidental death and dismemberment (AD&D) insur-
ance was available to 71 percent of the life insurance par-
ticipants. This insurance provides additional benefits if a
worker dies or loses an eye or a limb in an accident. For 82
percent of these workers, the AD&D benefit equaled their
basic life insurance benefit for accidental death, and a por-
tion of that benefit for dismemberment.

In addition to basic coverage, nearly two-thirds of all life
insurance participants had supplemental coverage avail-
able. The great majority of these employees were required
to pay the full premium for such benefits. The typical
supplemental plan provided term lifeinsurancein multiples
of 1-to 3-times annual earnings, at the employee’s option.

Life insurance coverage for dependents was available to
42 percent of participants. About half of the workers with
this coverage were required to pay the entire premium to
obtain coverage, while the other half had available either
joint employee-employer paid or entirely employer—paid
dependent coverage. Benefits for dependents that varied
by employee option increased significantly in 1989. For
spouse coverage, 31 percent of participants with depen-
dent coverage available could choose between varying op-
tions, compared to 9 percent in 1988. (The figures were 25
and 7 percent, respectively, for child coverage.) Flat—dol-
lar benefits were still the most prevalent, however. In such
plans, spouse coverage averaged $5,205, and coverage for

47

children averaged $2,859 in 1989.27

Plans providing a monthly income to surviving mem-
bers of an employee's family covered 7 percent of partici-
pants. These survivor income benefits were in addition to
other benefits, such as basic life insurance and survivor
pension benefits. Survivor income payments were general-
ly a percentage of the employee’s earnings or a flat dollar
amount. Benefits usually continued for 24 months, al-
though some continued until a specific event occurred,
such as the surviving spouse remarrying or reaching age
65, or surviving children reaching a given age.

Basic life insurance coverage continued after retirement
for 42 percent of the participants, down from 49 percent in
1988. This coverage almost always continued for the re-
mainder of the retiree’s life, but the amount of the benefit
was reduced at least once for 90 percent of employees with
coverage after retirement.

Half of all life insurance participants were required to
work a minimum period to qualify for the plan. Thirty-
five percent of these workers had a 3-month requirement,
but 1 month was also common.

27 In 1989, for the first time the survey included questions on the avail-
ability of supplemental and dependent life insurance coverage paid for
entirely by the employee. Such plans are available at group premium
rates, thus providing an advantage over individual coverage



“Table 81. Defined benefit pension plans;' Percent of full-time participants in plans with percent of career earnings benefit
formulas by type and amount of formula, medium and large firms, 1989

Provision for Provision for
Provision for integration with Provision for integration with
maximum benefit? Social Security maximum benefit? Social Security
Type and amount of | rota) benefit Type and amount of | Toya) benefit
formula! Without formulat Without
Subject | Not sub- |With inte-| “ye Subject | Not sub- |With inte.| “iio!
to maxi | jectto | grated | tty to maxi-| jectto | grated | They
mum maximum} formuta | oer muri |maximum| formula | Smt
All participants: Professional and
administrative
Total 100 100 100 100 100
Total 100 100 100 100 100
Flat percent per year of
service 40 59 39 5 94 ||Flat percent per year of
8 - 8 - 20 i 42 83 42 5 96
5 - 2 1 9 4 - 4 -
18 - 19 - 45 5 - 3 - -
2 - 2 3 - 24 - 25 - -
6 - 7 1 15 1 - 1 - -
2 - 2 - 5 7 - 7 - -
2.25 or greater 1 - 2 - -
59 4 60 95 5. ||Percent per year
4 - 4 3 5 varies .. 58 47 58 95 4
43 - 43 71 - ‘By service 4 - 4 - -
iv) - 0 iv) - 40 - 40 - -
By earnings and i) oO - -
service 12 - 13 20 - By earnings and
service . 13 - 14 - -
Other .. 0 - i) - 1
“ - Oo - iy)

Excludes supplemental pension plans.
2 Ifa plan contained more than one career earnings formula, a primary
formula was selected and tabulated. This table includes plans with ca-
reer earnings formulas that serve as an alternative to a ‘terminal earnings

formula,

* These maximum provisions are independent of Internal Revenue
Code ceilings on pensions payable from defined benefit plans.

* Less than 0.5 percent.

92

* includes formulas based on a flat percentage of earnings, some

varying by length of service.

NOTE: Data were insufficent to show technical-clerical and production-

service workers separately. Because of rounding,

‘sums of individual

items may not equal totals. Where applicable, dash indicates no employ-
ees in this category, or data were insufficient to show further breakouts.



Table 26. Sickness and accident insurance:. Percent of full-time participants by type and duration of payments, medium and
large firms, 1989—-Continued

Maximum weeks of coverage
Type of payment Total | oss than Varies by
<3 13 14-25 26 27-51 52 Over 52 | "orice
Professional and administra-
tive—Continued
$140-8158 .. 3 - ) - 2 ) - - -
$160-S179 .. ) - - - ¢) - - - :
$180-$199 .. 1 - - - “ z 0 7 2
$200-$219 . 0) - C) - - - - - -
$220 or mor () - 0) - 0 - - - -
Weekly dollar benefit varies .. 3 - 1 - 1 ¢) 1 - ¢)
By e8MniNQS un 3 - 1 - 1 0) 1 : 0)
iv) - - - - - - - 0)
Data not available .. 2 - - - 1 - - 1 -
Technical and clericat
Al types... 400 2 1" 4 7 3 5 2 3
Fixed percent of earning 78 1 9 4 59 1 1 1 2
Less than 50 ) - - - 0) - - - .
33 7 3 1 29 - - 0) )
19 1 4 1 a () 1 Yo
1 - - - 1 ~ i) - -
7 0) 0) 14 cv) 1 1 0
2 1 () iy) 1 ) - iv] oO
4 - 2 1 1 1 - Y -
- - Y 1 - - - ty
0 0 - oO 0) - - cu)
Percent of earnings varies 6 V) ) 0) 2 1 2 - 1
By service .... 3 i) - - 1 ie) 2 - i)
By length of disability 2 - () 10) oO - r0) 0)
By both service and length of
disability .. 1 - - - 1 - - - 0
By earings - - - 0) 1 - - ~
Fixed weekly dollar benefit 10 - 1 1) 8 a) ¢) “) )
Less than $60 .. 3 - ¢) - 3 - - - ~
$60-$79 Q) - () 10) () - - vy -
$80-$99 1 - 0) - 0) - - - 7
$100-$11: 2 - (0) ) 2 - - - :
$120-$139 rv) - ~ - ro) - - - -
$140-$159 2 - ") oO 2 cv) - - -
$160-$179 0) - - - 0) 10) - - -
$180-$199 1 - - - “ . 0 a >
$200-8219 even 0) - - - () . - : a
$220 or more... 1 - iv) - iv) - 0 - iv)
Weekly dollar benefit varies .. 4 - 1 - 4 1 1 . 0
By earnings ... 4 - 1 - 1 4 1 0
By service or length of disability.| (") - ) - a) - - 7 0)
Data not available . 2 - - - 1 - - 0) -
Production and service
All types 100 1 16 3 60 2 13 1 6
Fixed percent of earnings 45 ) 6 1 34 ¢) 2 1 1
Less than 50 . 0) - 0) - 0) - - ~ -
. . a - 2 1 17 - - 9) 0)
10 0) 2 iv) 6 ) 1 0 1
1 - - - 1 - 0) - -
10 - 1 0) 8 - 1 0 0)
2 ie) Q) Q) 2 9] Vv) 0) 0)
1 - iv) 0 10) 0) - tu) ~
1 - i) 0“) Y - - - r¥)

See footnotes at end of table.

30


Standard errors for the percentage estimates were com-
puted from a representative portion of the 1989 survey
data. To simplify their presentation, a curve was fitted to
the standard error estimates, by regression techniques
(chart A-1).

The curve’s equation is:

$= eatd {inc}? + ¢ {1n(100-P)} 74 4 In(P) In (100-P)]
where:

S = standard error

P = percentage estimate from the bulletin
e = exponential function

in = natural logarithm function.

For the 1989 Employee Benefits Survey,

a = -0.41325, b = -0.04720, c = -0.03323; and
d =0.15986.

These are regression coefficients. The curve fits the data
with R? = 0.82 and no pattern in the residuals. Moreover,
differences between this curve and curves based on pre-
vious years survey data are primarily due to the differences
in sample size.

The equation of the curve was obtained empirically, by
starting with the equation:

S =a P?(100- Py.

130



Table 9. Paid vacations: Percent of full-time employees by amount of paid vacation provided at selected periods of
service, medium and large firms, 1989—Continued
Profes- Profes-
sional [Technical] frOOUe, sional [Technicaty Frowues
All em- | and ad- | and cleri- i All em- | and ad- |and cleri-| "0"
Vacation policy ployees | ministra- | cal em- employ: Vacation policy ployees | ministra-| cal em- | SoC®
tive em- | ployees | URS tive em- | ployees | °mPIOY-
ployees ployees ees
‘At 20 years of service: At 25 years of
Under 5 days (9) ® Q (9) service—Continued
5 days to) () i) 1 Over 20 and under 25
10 days 4 2 3 5 days... 3 4 2
Over 10 and under 15 25 days 34 36 32 33
@ (a) e Q Over 25 and ur i
ys 14 8 13 18 2 2 3 1
Over 15 and under 20 4 4 3 3
days a 1 2 2 3 2 2
51 55 85 46
Over 20 and under 25 At 30 years of service?
days 3 4 4 2 Under 5 days ro) - - io)
25 days 19 22 16 18 5 days i) a) ) 1
Over 25 and under 30 10 days 3 2 a 5
days . 2 2 3 1 Over 10 and under 15
30 days 1 1 1 1 days 3) i) Gy Q
Over 30 days 2 3 2 1 15 day 13 8 13 16
Over 15 and under 20
At 26 years of days 1 iv) 0) 2
service: 20 days 34 38 37 30
Under 5 days .. Q - - is) Over 20 and under 25
5 days a 10) @ 1 days 2 3 3 1
10 days . 3 2 3 5 25 days 30 a2 30 29
Over 10 and under 15 Over 26 and under 30
days ig) ) a 19) days 2 2 3 1 :
15 days 13 8 13 16 80 days 8 9 7 7 |
Over 15 and under 20 ‘Over 30 days .. 3 4 3 3
days 1 ®) } 2
20 days 35 39 38 30 _||Not provided paid vacations 3 2 1 5
+ Employees receiving no paid vacations in their early years of service ® Less than 0.5 percent.
are included in the overall percentage of workers provided paid vaca- ® Provisions were virtually the same after longer years of service.
tions: however, they are disregarded in computing the distributions by
length of service up to the service period at which they-become eligible NOTE: Data include anniversary year bonus days. Where applicable,
for vacations. dash indicates no employees in this category.

Table 10. Paid vacations: Percent of full-time participants
by length of service required to take vacation, medium and
large firms, 1989

Profes-
sional | Techni- | Produc-
; All par- |, 204} cal and | tion and |
Length of service requirement | jcjoants | adminis-| clerical | sorvico |
trative | partici- | partici-
partici- | pants pants 1
pants
Total .. 1o0 | 100 | 100 | 100 |
With service requirement | 95 92 94 96 |
1 month 6 9 9 4 |
2 months . 1 2 1 1 i
3 months .. 10 "1 12 7
4-5 months 1 1 1 1
6 months .. 35 43 42 27
7-14 months 1 iV) 1 1
4 year 40 26 29 55
Over 1 year iv) - (0) 1
Without service requirement .. 5 7 5 2
Service requirement not i
determinable .. 1 1 0) 1 |

* Less than 0.5 percent.

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

14


Table 50. Medical care benefits: Percent of full-time participants in plans with drug abuse treatment benefits by extent of

benefits, medium and large firms, 1989

Professional and adminis-

Technical and clerical Production and service

All participants trative participants participants participants
Coverage limitation Inpatient|inpatient| Out- | inpatient|Inpatient] Out- | Inpatient|inpatient| Out- | inpatient|Inpatient| Out-
detoxit- | rehabil-| patient | detoxif- | rehabili-| pationt | detoxifi-| rehabili-| patient | detoxifi-| rehabil- | patient
cation’ | tation? | care? | cation’ | tation? | care? | cation’ | tation’ | care’ | cation' | tation? | care®
Total 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100
With coverage 10 | 64 | se | 100 | 64 | 59 | 100 | 60 | s8 | 100 | 65 | 58
Covered the same as other illnesses | 45 8 7 | 4 8 7 | 4 9 7 | 43 7 7
Covered the same as mentalitiness.| © | © | O | O | O 11010 110) 6} 6
Subject to separate limitations* ss | 55 | st | 54 | 66 | se | s2 | s1 | so] 57 | 58) 50
Limit on days .. ao | 42 | 20 | 4 | 43 | a | a6 | a7 | we | 43 | a4 | at
Per year 26 | 2 | 18 | 27 | 31 19 | 24 | 26 | 17 | 2% | 2 | 19
Per confinement is | 12 2) 13 | 10 1] 12 | 40 2] a7 | 4 2
Per lifetime . 1" 13 5) on | 4 4] ow] ou a) 4 13 7
Limit on doliars 23 | 23 | 95 | 23 | 23 | a5 | 24 | 22 | 36 | 23 | 23 | 24
Per day . ry 1 | 1 s/o] 6 7/09 | @ 6
Per year 7 6 | 24 7 6 | 25 6 5 | 24 8 7 | 24
Per confinement 9) V) - i) iy) ~ oO 19) : () () -
Per lifetime .. 19 | tw | tw | i9 | 18 | 1 | 2 | 18 | 2 | tw | 18 | 18
Per other peri 1 1 2 1 1 1 1 1 2 1 1 2
Coinsurance limit® 6 6 | 1 7 7 | 1 7 6 | 1 6 5 | 19
Gelling on out-of-pocket expenses!
does not apply | 8 8) 18 8 e} tw} 1 | 1 | 2 8 7 | 7
Separate copayment or
deductible .. 1 1 6 1 1 8 1 1 7 1 1 5
Other limitations “ Y iv) iy) iy) i) iv) oO “) iv) iV) “y
Without coverage .. “ aa | a2 | a | 4 | 4 4a} 4a] 3 as | 42

* Detoxification is the systematic use of medication and other methods
under medical supervision to reduce or eliminate the effects of substance
abuse.

2 Rehabilitation is designed to alter abusive behavior in patients once
they are free of acute physical and mental complications.

? Includes treatment in one or more of the following: Outpatient depart-
ment of a hospital, residential treatment center, organized outpatient clinic,
day-night treatment center, or doctor's office. If benefits differed by loca-
tion of treatment, doctor's office care was tabulated.

58

* Less than 0.5 percent.

* The total is less than the sum of the individual items because many
plans had more than one type of limitation,

® Coinsurance rate is lower than that applying to other medical serv-
ices.

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



by the survey and the District of Columbia. The reference
date of the available UI reports was generally March 1987.
The refinement procedures included an effort to ensure
that most sampling frame units corresponded to the defini-
tion of an establishment developed for this survey. (Estab-
lishments in the manufacturing industries were not refined
because of limited resources. A small number of addition-
al sampling frame units were not refined to correspond to
the definition of an establishment because of limited re-
porting ability of companies.)

Sampling design

The sample of 1,970 establishments” was selected by
first stratifying the sampling frame by industry group and
establishment size group based on the total employment in
the establishment. The industry groups consisted of two—
digit Standard Industrial Classification Major Groups, as
defined by the Office of Management and Budget.

The number of sample establishments allocated to each
stratum (defined by industry and size) was approximately
proportional to the total employment of all sampling
frame establishments in the stratum. Thus, a stratum that
contained 1 percent of the total employment within the
scope of the survey received approximately 1 percent of
the total sample establishments.

Each sampled establishment was selected with a prob-
ability approximately proportional to the average esta-
blishment employment of its stratum. For example, con-
sider two strata: A and B, with respective average
establishment employment of 5,000 and 1,000. An estab-
lishment in stratum A is five times more likely to be se-
lected than an establishment in stratum B.

A sample was then selected within each stratum using a
probability technique to maximize the probability of re-
taining the establishments selected in the 1988 survey.?
This method of selection reduced collection costs by de-
creasing the number of new establishments in the sample.

Data collection

Data for the survey were collected by visits of Bureau
field economists to the sampled establishments. To reduce
the reporting burden, respondents were asked to provide
documents describing their flexible benefits plans, reim-
bursement accounts, retirement and capital accumulation
plans, medical and dental care, and insurance benefits.
These were analyzed by BLS staff in Washington to obtain
the required data on plan provisions. Data on paid leave
generally were obtained directly from the employer at the
time of the visit.

2 The number of sample units selected in this survey is determined by
resources, operational constraints, and knowledge of the sampling er-
tors of estimates in previous years’ surveys.

3 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 Asso-
ciation, 1951, No. 46, pp. 105-9.

127

Data were collected primarily during the months of Jan-
uary through July, reflecting an average reference period
of April 1989. 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 who were covered by paid leave plans or unpaid
parental leave plans; participated in medical and dental
care, insurance, retirement, or capital accumulation plans;
or were eligible for flexible benefits plans, reimbursement
accounts, or other selected benefits. Except in tables 2,
114, and 115, counts of workers covered by benefit plans
included those who had not met possible minimum
length-of-service requirements at the time of the survey.

Most of the tables in this bulletin show the percent of
workers covered by individual benefit plans or plan provi-
sions. Percentages are calculated in three ways. One tech-
nique, followed in tables 1, 3~5, 7, 9, 12-16, 18, 2.0, 21, 98,
and 99, shows the number of covered workers as a percent
of all workers within the scope of the survey; tables 2 and
114 show the number of eligible workers as a percent of all
workers.

A second approach is followed in tables 8, 10, 11, 17, 26,
28, 29, 32-38, 52, 53, 58, 68, 76, 100, 112, and 113. These
tables 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. They answer ques-
tions concerning the typical coverage provided to persons
with a given medical care, dental care, insurance, retire-
ment, or capital accumulation plan; for example, what
percent of all employees with medical care receive pre-
scription drug coverage?

The third approach provides a close look at an impor-
tant plan feature (tables 27, 30, 31, 39-51, 54-56, 59-67,
69-70, 72-75, 77-84, 86-88, 90-91, 93-97, 102-105,
107-111, and 115), for example, what percent of all em-
ployees with accidental death and dismemberment bene-
fits have coverage equal to their life insurance benefits?
Tables 25, 89, 92, 101, and 106, use a combined approach,
indicating in the first row of data the percent of persons
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
incidence 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 appropri-
ate factors. For example, to calculate the percent of all
employees in plans paying for eyeglasses, multiply the per-
cent of those with vision plans that cover eyeglasses (68
percent from table 54) by the percent of medical care par-
ticipants with vision care coverage (35 percent from table
37), and multiply that product by the percent of all em-
ployees who have medical care coverage (92 percent from



Table 98. Retirement and capital accumulation plan
coverage: Percent of full-time employees by participation in
retirement plans and capital accumulation plans, medium
and large firms, 1989

Profes-
sional | Techni- | Produc-
Altem. |. 2% | cal and | tion and
Type of plan Tovees |2dminis-| clerical | service
Ploys trative | employ- | employ-
employ-| ces | ees
ces

Total .. 100 100 | 100 | 100

Covered by retirement or capital
accumulation plan
Retirement’ only

83 87 83 81
69 69 69 70

Capital accumulation? only i 2 1 1
Retirement and capital
accumulation 12 16 13 10
Not covered by retirement or capital
accumulation pian 7 13 7 19

* Includes defined benefit pension plans and defined contribution plans
such as money purchase pension, profit sharing, and savings and thrift
plans in which empioyer contributions must remain in the parlicipant's ac-
count until retirement age, death, disability, separation from service, age
59 1/2, or hardship,

* Includes plans in which employer contributions may be withdrawn
from participant's account prior to retirement ago, death, disability, separa-
tion from service, age §9 1/2, or hardship. Excludes pure cash profit shar-
ing, stock option, and stock purchase plans.

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

11

Table 99. Defined contribution and stock plans: Percent of
full-time employees participating by type of plan, medium
and large firms, 1989

Profes-
sional | Techni | Produc-
: Alem. |_ 20d | cat and | tion and
Type of plan ployees [2aminis-| clerical | service
trative | employ-| employ-
employ-| ees ees
ees
Savings and thrift’ 30 4a 38 at
Profit sharing | 16 15 13 18
Immediate cash OMY on nnecnnn| 1 1 1
Deferred benefits only .. 413 12 1" 4
Combination .. 2 1 2 2
Employee stock ownership .. 3 4 3 3
Money purchase pension 5 8 6 3
Stock bonus .. 19) 1) 9) a]

* Includes 0.3 percent of employees in plans with both matching and
nonmatching employer contributions. Not all participants in such plans
may elect or be required to contribute

Less than 0.5 percent,

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



Table 102. Savings and thrift plans; Percent of full-time
participants by maximum allowable employee contribution,’
medium and large firms, 1989

Profes-
sional | Techni- | Produo-
Allpar- | 20d _| cal and | tion and
Maximum allowable contribution® | j,i ante |Sdminis- | clerical | service
ipants | “tative | partici- | partici-
partici- } pants | pants
pants
Total .. 100 | 100 | 100 | 100
Percent of employee earnings 97 98 98 94
5 percent or jess 2 2 1 3
4 4 4 3
4 6 4 2
1 1 1 0)
12 9 n 17
1 2 1 iv)
0) 19) a) 1
13 13 14 12
1 ) 1 1
3 3 5 1
2 2 2 2
7 20 7 14
2 7 25 22
5 7 3 4
iy) iv) is) iv)
3 2 3 4
1 1 1 1
4 4 3 4
20.01-24.99 percent 1 2 1 1
25 percent 2 2 1 3
Greater that Vv) iV) i) 1
Specified dollar amount 1 is) 1 3
Internal Revenue Code limit 1 1 1 )
Other. 1 1 1 2
Data not available a) ) 0 )

* Includes contributions that may not be matched by the employer.
* if maximum varied by participant's length of service, age, or both, the
highest possible percentage was tabulated.

* Less than 0.5 percent.

* Includes participants in plans where the employee's contribution was
a fixed percent of earnings up to a specified dollar level and a higher per-

centage above that level.

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

Table 103. Savings and thrift plans: Percent of full-time participants by provision for pretax employee contribu-
tions, medium and large firms, 1989

Professional and i ,
aie Technical and clerical | Production and service
Item All participants: administrative partici participants participants
Total ... 100 100 100 100
Pretax contribution allowed .. 92 94 94 89
Pretax contribution not allowed 8 6 6 an)

NOTE: Because of rounding, sums of individual items may not
equal totals. Where applicable, dash indicates no employees in

this category.

113



Chapter 1. Incidence of
Employee Benefit Plans

The employee benefits survey conducted by the Bureau
of Labor Statistics provides data on employee work sched-
ules and develops information on the incidence and de-
tailed characteristics of employee benefits paid for, at least
in part, by the employer. These benefits include lunch and
rest periods; holidays, vacations, and personal, funeral,
jury—duty, military, parental, and sick leave; sickness and
accident, long-term disability, and life insurance; health
and dental care; and private retirement/capital accumula-
tion plans. Because data collection is limited to formal
plans, the extent of such benefits as rest periods and per-
sonal leave may be understated.

Data also are collected on the incidence of several other
benefits, including severance pay, subsidized parking, fi-
nancial counseling, child care assistance, wellness pro-
grams, employee assistance programs, and educational as-
sistance. In addition, information was obtained on flexible
benefits plans, reimbursement accounts, and unpaid pa-
rental leave.

The great majority of full-time workers within the
scope of the Employee Benefits Survey were provided!
health care, life insurance, and private retirement plans, as
well as paid holidays and vacations (table 1). Among other
benefits studied and commonly available in 1989 were em-
ployer-subsidized parking and reimbursement for em-
ployee educational expenses (table 2).

Time-off and disability benefits

Several paid time-off benefits, including vacations, holi-
days, jury—duty leave, and funeral leave, are commonly

' Data were collected on the number of workers “participating” in
benefit plans paid for at least in part by the employer. (There are a few
exceptions to this general rule. The survey tabulates the availability of
postretirement medical care and life insurance, dependent life insur-
ance, supplemental life insurance, and long-term care insurance even
if such coverage must be fully paid for by an employee or retiree. This
is because the guarantee of insurability and availability of coverage at
group premium rates can be considered a benefit. In addition, reimburs-
ment accounts, salary reduction plans, and parental leave plans are tab-
ulated even if there is no employer cost involved.) All workers were con-
sidered participants in wholly employer-financed plans that require a
minimum length of service, even if some workers had not met those re-
quirements at the time of the survey. Where plans—such as medical
care or life insurance—required an employee to pay part of the cost
(contributory plans), workers were considered participants only if they
elected the plan.

provided to all workers.? In contrast, sick leave, provided
to 68 percent of workers, and personal leave, provided to
22 percent of workers, are found more frequently among
white-collar workers.? Formal paid lunch and paid rest
time provisions are more common among blue-collar
workers.

There are several reasons for these variations among
worker groups. Although sick leave is more commonly
available to ‘salary-based white-collar workers, hourly
paid blue-collar workers have similar protection through
sickness and accident insurance plans. For lunch and rest
time, the survey captured data only on formal arrange-
ments, those specifically in writing or reasonably expected
and available to everyone. Such arrangements often were
the result of collective bargaining agreements and were
found more frequently among blue-collar workers. Simi-
lar. arrangements may exist on an informal basis for white—
collar workers,

Unpaid maternity leave was available to 37 percent of
all workers and unpaid paternity leave to 18 percent.
There was little variation by occupational group. (Such
benefits are separate from vacations, sick leave, and other
time-off provisions that also may be available to new par-
ents.) Paid parental leave was rare.

Unlike sickness and accident insurance, long-term dis-
ability insurance, which provides income replacement
during extended or permanent periods of disability, is
much more commonly available to white-collar (61 per-
cent of employees) than to blue-collar workers (27 percent
of employees). To meet the long-term income replace-
ment needs of blue-collar workers, defined benefit pension
plans typically begin paying a disability pension immedi-

2 In addition to data on all full-time employees in medium and large
establishments, data are presented separately for three occupational
groups—professional-administrative, technical-clerical, and produc-
tion-service workers. This bullétin often discusses the first two groups
jointly as white-collar workers, in contrast with production-service, or
blue-collar workers. (Between 1979 and 1986, production-service
workers were labeled “production” workers.)

3 Workers covered by a plan were labeled participants whether or not
they used a benefit. Thus, while the tables in this bulletin describe the
provisions of, for example, sick or parental leave plans, they do not indi-
cate the number of employees using these benefits or the amount of
leave time taken.

1
i
i



Table 79. Defined benefit pension pians:' Percent of

full-time participants in plans with terminal earnings formulas
by definition of terminal earnings, medium and large firms,
1989
Profes-
sional | Techni- | Produc-
; Al par.|_2nd_| cal and | tion and
Definition of terminal earnings | icipants | adminis-| clerical | service
trative | partici- | partici-
partici- | pants | pants
pants
Total .. too | 100 | 100 | 100
Three years .. 16 16 16 17
Last 3 i 2 2 (a)
High 3. 3 2 2 4
Of last 10 (a) is) 1 1)
Of career 2 1 1 4
High consecutive 3 12 12 W 13
2 2 2 1
6 6 4 8
3 3 4 4
ce) 1 (0) (o)
81 at 82 79
3 5 3 2
2 8 9 18
Of last 10 3 4 2 4
Of last 15 i) 0) to) .9)
Of career .. 8 4 6 4
High consecutive 65 69 70 59
Of last 10 50 52 52 46
Of last 15 iV) 1 1 iy)
Of career .. 15 16 7 12
Other .. a) (a) io) (9)
Other period? 4 3 3 4

‘ Excludes supplemental pension plans.

? Less thar 0.5 percent.

5 Formulas based on earnings during period other than 3 or 5 years’
service, or period not immediately before retirement (for example, first 5 of

last 10 years’ service).

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

tals. Where applicable, dash indicates no empioyees in this category.



Table 29..-Long-term disability insurance: Percent of full-time participants by method of determining payment, medium and

large firms, 1989—Continued

Type of maximum provision

With maximum Without maximum
Method Total coverage Plan maximum | Disability income |Plan and disability| coverage
only! maximum only? | income maximum
Production and service
All methods .. 100 74 36 16 22 26
Fixed percent of earnings . a 62 30 14 19 9
Less than 50 percent 2 1 1 ) - ©
50 percent 23 ai 5 to 6 2
60 percent 37 31 18 3 10 6
65 or 67 per 8 8 5 ) 3 )
70 percent or more 1 @ iv) io) ro) 1
Other percent .. 1) is) i) - is) iv)
Percent varies by earnings 6 4 1 1 2 2
Percent varies by service 5 5 5 e iv) 7)
‘Scheduled dollar amount varies by
earnings 15 0 O) - - 18
Other’. 3 3 1 1 1 -

* Includes flat dollar maximums and dollar maximums that vary by

years of service.

? Includes ceilings on income during disability that limit the total
amount payable from the long-term disability insurance plus other in-
come, such as dependent Social Security and rehabilitative employment

income.

* Less than 0.5 percent.
* Includes flat dollar amounts and scheduled percent of earings
varying by length of disability,

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

35



employees pay for expenses not covered by their regular
benefits package. These accounts, also called flexible
spending accounts, are usually financed by employee pre-
tax money, although some accounts are funded either
wholly or partly by employers. Reimbursement accounts
may be part of a flexible benefits plan or they may stand
alone.

More than three-quarters of employees eligible for re-
imbursement accounts could allocate funds for health care
deductibles and coinsurance and for other health expenses
not covered by their health care plan (table 115). Almost
90 percent of eligible employees could use money from
these accounts to pay for dependent care expenses, gener-
ally both child care and care for elderly or disabled rela-
tives. Reimbursement account funds could be allocated

for the payment of the employees’ share of health care pre-
miums by 40 percent of eligible employees, while less than
20 percent could use these accounts to pay for other insur-
ance premiums, such as life insurance or a spouse’s insur-
ance premiums. Less than 5 percent could use their reim-
bursement account funds to pay for legal services.

Nine of ten employees participating in flexible benefits
plans or reimbursement accounts were required to contrib-
ute toward the cost of their benefits, or were allowed to con-
tribute to obtain additional benefits, Nearly all of these con-
tributions were in the form of a salary reduction arrange-
ment.

Individual benefit plans offered through a flexible bene-
fits plan were analyzed and included in the tabulations for
specific benefit areas in this bulletin.

Chart 7. Flexible benefits plans and reimbursement accounts:
Percent of full-time employees eligible, medium and large firms,
1986-89
Percent
O Flexible
benefits plans
40 +
lm Reimbursement
accounts
30 7
20 -
10 +
° — |
1986 1988 1989



Table 85. Defined benefit pension plans:' Average replacement rates for specified final earnings and years of service,’

medium and large firms, 1989—Continued

Years of service

Final annual earnings
10 15 20

25 30 35 40

Combined private pension and primary‘ Social Security benefit

Production and service

57.6 63.6 69.9
521 57.2 62.6
48.4 53.1 58.0
38.7 43.2 47.9
32.6 37.1 aS
28.2 92.5 36.9

75.8 817 87.2 92.3
67.8 72.9 775 819
628 67.4 77 75.6
52.3 56.6 60.3 63.7
45,9 49.9 53.4 56.6
Ae 45.1 48.4 51.4

' Excludes supplemental pension plans.

? Retirement annuity as a percent of earnings in the final year of work.
The maximum private pension available to an employee, not reduced for
early retirement or joint-and-survivor annuity, was calculated under each
pension plan using the eamings and service assumptions shown, This
benefit level was then expressed as a percent of earnings in the last year
of employment,

These calculations assume employees retired on January 1, 1989,
and final earnings are for 1988. Earnings histories, necessary for
applying the pension formulas, were constructed for each final earnings
level based on data provided by the Social Security Administration.

97

For private pension formulas that are integrated with Social Security
{see table 83) and for computation of Social Security benefits, the worker
is assumed to have retired at age 65 and paid into Social Security for 40
years. Computations exclude 3 percent of participants in cash account
pension plans or plans with benefits based on career contributions.

* The years of service intervals represent total service with the
employer. Time spent satisfying service requirements for plan
Participation was excluded from the calculation of replacement rates,
unless the pension plan specified that such time was to be included in
benefit computations,

* Excludes benefits for spouses and other dependents.



Table 33, Long-term disability insurance: Percent of full-time Table 35. Long-term disability insurance: Percent of

participants by duration of benefits, medium and large firms, full-time participants by coverage for mental iliness, medium
1989 and large firms, 1989
Profes- Profes-
sional | Techni- | Produc- sional | Techni- | Produc-
‘Alt pare |_28d__ | cal and | tion and ‘Alt par. |. 29d | cal and | tion and
Ouration depante [24minis-| clerical | service ter eipants| #amiris-| clerical | service
op trative | partici- | partici- Pp trative | partici- | partici-
partici | pants | pants partici- | pants | pants
pants pants
Total oo | 100 | 100 | 100 Total 100 | 100 | 100 | 100
For life 2 2 1 3 With coverage for mental illness .....) 94 os | 93 | 96
To retirement age .. "1 13 10 1" Without limits .. so | 45 | 49 | 87
Varies by age when disability Benefits limited 44 48 | 44 | 39
occurs’ | 80 82 84 nm Benefits provided only if
‘One-time reduction 25 23 25 30 institutionalized .. 1 2 2/0
Gradual reduction 54 59 59 41 Benefits provided only for
limited period unless
Other 7 3 4 15 institutionalized .. 40 42 39 36
3 2 3 3
Provision not determinable 1 1 1 0) 36 39 36 | 32
1 1 1 1
+ The duration of benefits may be reduced gradually according to an Bene Oe 3 4 3
age schedule or reduced once at a specified age. 12 monte “ 0 0 0
? Includes durations that vary by length of service. or
> Less than 0.8 percent. 24 months .. 2 3 3 +
; . Other 4 1 0 2
NOTE: Because of rounding, sums of individual items may not equal to-
tals, Whore applicable, dash indicates no employees in this category. No coverage for mental illness wun] 4 5 5 2
Coverage not determinable ... 2 2 2 1

* Less than 0.5 percent.

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

Table 34. Long-term disability insurance: Percent of
full-time participants by length-of-service requirements for
participation,’ medium and large firms, 1989

Profes- Table 36. Long-term disability insurance
sional | Techni- | Produc- full-time participants by provision for survivor benefits,
Nl pare |__27d_ | cal and | tion and medium and large firms, 1989
Length-of-service requirement | figants| adminis-| clerical | service
trative | partici- | partici- Profes-
partici- | pants | pants sional | Techni- | Produc-
pants Al pare | and_| cal and | tion and
Type of annuity for surviving spouse | cients | adminis-| clerical | service
Total... 100 | 100 | 100 trative | partici- | partici-
partici- | pants | pants
With service requirement 63 61 67 63 pants
1 month 9 10 8 7
2 months .. 7 4 5 2 Total 400 | 100 | 100 | 100
3 months .. 13 13 13 2
4-5 months 1 19) (9) 2 With survivor benefits 28 33 30 18
6 months .. 12 1 12 14
e® e 7) e) Lump sum payment 19 24 24 10
13 13 16 1 3 times monthly benefit 18 23 20 9
@ i) °) - Other . 1 1 1 1
5 4 10 1
1 2 1 1 Percent of monthly benefit’... 8 9 9 7
Over 3 years 3 3 2 3 Less then 100 percent 1 1 1 1
100 percent .. 7 7 8 6
Without service requirement 35 38 31 36
Other benefit? ... 1 1 iv) 1
Service requirement not determin-
able . 1 1 2 1 No survivor benefits... 71 66 69 8
TM Lenath of time employees must be on the job before they are cov. Benefit not determinable 1 1 ‘ '
ered by a plan that is at least partially employer financed. There is fre-
quently an administrative time lag between completion of the requirement * Bonefits are payable for a limited time period, typically 6 months.
and the actual start of participation. If the lag was 1 month or more, it 2 Includes plans that pay any unpaid balance of an accrued benefit to a
was included in the service requirement. survivor.
® Less than 0.5 percent. 3 Less than 0.5 percent.
NOTE: Because of rounding, sums of individual items may not equal to- NOTE: Because of rounding, sums of individual items may not equal to-
tals. Where applicable, dash indicates no employees in this category. tals. Where applicable, dash indicates no employees in this category.

38