erally, supplemental payments end when Social Secu-
rity payments begin (either reduced payments at age 62
or full benefits at age 65), and the reduced pension is
then payable for life. Other employers elect to offer
similar incentives outside of formal plan provisions to
employees who retire within a specified limited time
period.”

Disability retirement. A career-ending disability may
entitle an employee to a pension at an earlier than nor-
mal retirement age. If the disability satisfies the plan’s
definition of total disability, pension benefits often be-
gin immediately. When an employer provides other
sources of disability income, such as long-term disabil-
ity insurance, the disability retirement benefit might be
deferred until other forms of income have ceased.
Ninety percent of pension plan participants were cov-
ered by disability retirement provisions in 1984. Each
year since first tabulated in 1980, employees in plans
with immediate disability retirement outnumbered those
in plans with benefits deferred to normal or early re-
tirement age. The latter, however, increased by 8 per-
centage points over the period to 38 percent of the pen-
sion participants in 1984,

Seventy-nine percent of the production workers with
disability retirement coverage were in plans with im-
mediate benefits. White-collar workers with disability
benefits in their pension plans were nearly equally di-
vided between plans with immediate and deferred bene-
fits. Workers with deferred benefits were usually pro-
vided with long-term disability benefits ranging from
50 to 60 percent of earnings or more at the time of dis-
ability; this was more than that generally provided by
pension plans with immediate disability retirement.”
Furthermore, most deferred retirement benefits were
greater than immediate pensions, primarily because the
time during which LTD benefits were paid was typi-
cally added to an employee’s length of service for com-
putation of pension benefits.

Requirements for disability retirement were usually
based on specified years of service such as 10 years or
more. Seventeen percent of the participants, however,
had no age or service requirement for disability retire-
ment, and 22 percent had to meet the qualifications for
the LTD plan, which usually had a minimal service
requirement.

Postponed retirement. Employees who continue on the
job after age 65 rarely receive private pensions until
their actual retirement. Moreover, postponed retirement

"David H. Gravitz and Frederich W. Rumack, “Opening the Early
Retirement “Window,” Personnel, March/April 1983, pp. 53-57.

'*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.

is rarely fully reflected in the size of pension benefits
by both crediting the additional service and adjusting
pensions upward for the shorter retirement period.
Nevertheless, one-half of the participants were in plans
that made some adjustment for postponed retirement.

Forty-four percent of all participants were in plans
with benefit formulas that included credit for service
after age 65; 18 percent were subject to limits on the
number of credited years (frequently, only years up to
age 68 or 70). A number of plans with earnings-based
benefit formulas recognized earnings levels after age
65, even when service was not credited for these years.
Production workers were more likely than white-col-
lar employees to receive full credit for service after age
65. Multiemployer plans, established by collective bar-
gaining agreements, frequently provide for employer
contributions to the pension fund for covered employ-
ees regardless of age.

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

Postretirement pension increases. Inflation can severely
erode the purchasing power of a fixed pension through-
out a worker’s retirement years. Nearly one-half (49
percent) of pension plan participants were in plans
which increased pensions for current retirees at least
once during the 1979-83 period. Most of these increases
were not automatic but discretionary, or ad hoc, ad-
justments. The amounts of these ad hoc increases were
not directly linked to a cost-of-living index. Instead, re-
tirees’ current pensions were usually increased by ei-
ther a percentage varying by the length of retirement,
or a dollar amount per year of service. The latter type
of increase more often affected the pensions of produc-
tion workers, and frequently resulted from collective
bargaining agreement provisions.

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

This was the approach used to estimate average pen-
sion increases. For each plan granting an ad hoc in-
crease during the 1979-83 period, the amount of increase
was computed using three retirement periods (5, 10,



Table 25. Health insurance: Percent of full-time participants
in plans with major medical coverage by maximum benefit
provisions, medium and large firms, 1984

Profes-
sional | Techni-
‘Al pare |_an4_| cal and | Produc-
Type and dollar amount of maximum} j2; PAT: | adminis-| clerical | tion par-
Pp trative | partici- | ticipants
partici- | pants
pants
Total .... 100 100 100 100
With maximum limits’ .. a2 78 75 88
Lifetime maximum only 72 70 68 76
Less than $25,000 1 0) 1 1
$25,000 1 iy) iv) 1 i
$25,001-$49, a) - - 1
$50,000 3 1 1 5
$50,001-$99,999 2 1 iv) 3 H
$100,000 ... 4 2 5
$100,001-$249,999 4 2 2 6 i
$250,000 23 24 25 2 |
$250,001- 3 4 3 2
$500,000 12 12 W 12
$500,001-$999,999 1 2 2 1
$1,000,000 19 22 2t 7
More than $1,000,000 ro) (a) ) ro)
Annual or disability maximum
‘only 6 5 4 6
Both lifetime and annual or
disability maximums... 5 4 3 7
Without maximum limits. 18 24 25 12

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

? Less than 0.5 percent,

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

35



Table 20. Health insurance: Percent of full
and large firms, 1984—Continued

ime participants by coverage for selected categories of medical care, medium

Care provided
a Care not
Category of medical care Total an By basic By mejor er basic | provided
benefits only’ | medical only? | maior medical
Production

Hospital room and board . se 100 100 18 25 57 Q
Hospitalization—miscellaneous service: 100 100 18 25 87 Q
Outpatient care’ . 100 100 16 24 60 i)
Extended care facility® 100 60 27 24 g 40
Home health care® ... . 100 44 24 13 7 56
Surgical ... — 100 100 32 25 43 i]
Physician visits—in hospital .. 100 100 14 42 44 iv)
Physician visits—office on 100 94 5 73 9 6
Diagnostic X-ray and laboratory’ .. 100 100 27 36 37 ()
Prescription drugs—nonhospital 100 98 7 79 2 2
Private-duty aursing 100 93 5 87 1 7
Mental health care 100 99 13 25 62 1
Dental 100 76 71 5 24
Vision 100 33 30 3 i) 67

A provision was classified as a basic benefit when it related to the

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

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

31

categories of care.

3 Less than 0.5 percent.

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

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

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

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



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

and large firms, 1984

Besic | Basic | Basic | Malor Basic | Basic | Basic | Major
Funding medium hospitar’ | surgical’ | medical’ | medica | °°"'2! | hospital’ | surgical’ | medical’ | medical? Dental
All participants Technical and clerical
Total .. 100 700 700 100 700 700 700 100 100 100
Provided coverage cal ” 50" 91 7 67 67 43 93 5
Blue Cross-Blue 25 7, 16 18 4 25 15 14 4 4
Commercial cartier ... 23 a7 16 44 43 2 25 13 45 4t
Independent health plans .. 24 27 18 34 29 22 26 15 33 29
Labor/management 19 22 13 33 27 16 20 F 33 28
Health Maintenance
Organizations‘ 5 6 5 is) 2 6 6 6 0 2
Other? : iy) iy) - is) - iv) Q > iy)
Combined (0) ti] is) iv) 6 is) is) 0 0 i)
Not provided coverage @s 29 50 9 23 33 3a 7 7 25
|_——
Professional and administrative Production
Total .. 100 100 700 100 700 700 700 100 100 100
Provided coverage ... 68 67 42 93 79 5 75 58 a9 76
Blue Cross-Blue Shield . 24 13 12 12 4 26 19 18 13 5
Commercial carrier 22 28 18 48 45 24 28 18 a 42
Independent health plans .. 22 26 14 33 30 26 28 2 34 2
Labor/management® 16 20 6 32 27 22 25 18 34 27
Health Maintenance

‘Organizations* 6 6 6 6 2 4 4 4 fy) 2

Other! - 0 - i) - 0 o - 1

Combined i) is) iy) 0 is) is) iv) i) o 0
Not provided coverage ... 32 33 68 7 24 25 25 42 " 24

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

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

® Includes plans that are financed by general revenues of a com-
pany on a pay-as-you-go basis, plans financed through contributions to
a trust fund established to pay benefits, and plans operating their own

‘aclities if at least partially financed by employer contributions. In-
cludes plans that are administered by a commercial cartier through Ad-
ministrative Services Only-Minimum Premium Plan (ASO-MPP) con-
tracts and plans in which a commercial caitier provides protection only
against extraordinary claims.

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

‘Less than 0.5 percent.

¢ includes independent prepaid plans providing health benofits less
comprehensive than those of an HMO. Dental benefits plans spon-
sored by local dental societies are also in this category.

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


Chart 4. Coverage for selected types of medical care: Percent of full-time participants in
heaith insurance plans, medium and large firms, 1983-84

ponthigare
‘tended care
facility

. Alcoholism

treatment

Drug abuse
treatment

Home health
care

Second gical
Nag ps option

Hearing care

1 Coverage Increase in 1984
Eq Coverage in 1983,

\»

aa

awe’ ~

T

50 75 100
Percent

Percent of employees with dental benefits had yearly
maximums of $1,000 or greater in 1984, up from 44 per-
cent in 1980. Orthodontic services usually were subject
to lifetime maximums, which have increased since first
tabulated in 1980. Lifetime maximums of $1,000 or more
for orthodontia applied to 43 percent of participants in
dental plans providing this benefit in 1984, up from 17
percent in 1980.

Mental health coverage. Slightly over one-half of the
participants in plans with mental health benefits had
more restrictive hospital coverage for mental illnesses
than for physical ailments. These plans usually reduced
the duration of the hospital stay (often 30 days for men-
tal health care in basic hospital benefits, compared to
120 or 365 days for other illnesses) or imposed a sepa-
rate maximum on covered hospital expenses (such as a
lifetime maximum of $25,000 on mental health benefits),
Even more restrictive was coverage for mental health
care outside the hospital (psychiatric office visits). Out-
patient mental health care was usually covered in the
major medical portion of a plan, where ceilings were
often on the amounts payable for each visit and/or each
year, and where the coinsurance for nonhospital treat-
ment was often 50 percent, compared to 80 percent for
physical illnesses.

Other benefits. Provisions for second surgical opinions,

reflecting employer efforts to contain surgical costs,
covered 38 percent of the participants—up from 32 per-
cent the previous year (chart 4).

The incidence of alcohol and drug abuse provisions
increased sharply. The percent of participants covered
for alcoholism treatment grew from 53 to 61 percent
between 1983 and 1984, and for drug abuse treatment,
from 43 to 52 percent.

Thirty percent of health insurance participants were
covered for vision care expenses in 1984. Production
workers were the most likely to have this benefit, and
their plans typically were more comprehensive than
those for white-collar workers. .

Hearing care was available to 14 percent of partici-
pants in 1984, up from 10 percent the previous year.

Employee contributions. Cost-sharing measures taken
by some employers have not been limited to elimina-
tion of basic coverage and inclusion of higher major
medical deductibles. The percent of employees whose
health insurance premiums are wholly paid by their
employers has also declined (chart 5). Sixty-two per-
cent of health insurance participants had employee cov-
erage wholly financed by their employers in-1984, down
9 percentage points in 2 years. Forty-one percent also
could receive fully employer-paid coverage for their
dependents, compared with 51 percent when first tabu-
lated in 1980.



Section A
Funding media for major categories of health care
Hospital benefits
Surgical benefits
Medical benefits
Major medical benefits
Dental benefits

Administrative details

Pre-existing condition

Minimum age of dependent children

Waiting period in case of infant illness

Maximum age of dependent children

Retiree eligibility

Eligibility of retirees eligible for Medicare

Coverage of dependents of retirees eligible for
Medicare

Medicare contribution for retiree

Medicare contribution for dependents of retirees
eligible for Medicare

Disabled or retired employees’ benefit coverage

Coverage of retirees’ dependents not eligible for
Medicare

Survivors’ benefit coverage

Section B
Hospital and extended care coverage

Hospital room and board coverage

Hospital intensive care

Hospital miscellaneous coverage

Extended care coverage

Extended care in licensed extended care facility
Basis of extended care coverage

Extended care by home health care

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

Maternity care benefit
Who is covered

Obstetrical schedule

Voluntary abortion coverage

Miscarriages or therapeutic abortion coverage
Maximum for male sterilization

Maximum for female sterilization

Separate deductibles

Diagnostic X-ray and laboratory testing (DXL)
benefit
DXL coverage
Limitations on DXL coverage
DXL schedule

Selected DXL procedure maximums

Outpatient care and special accident benefit
Outpatient care coverage

Comparison of inpatient and outpatient coverage

Separate limitations

Outpatient charges covered under major medical

Accidental bodily injury—special benefit

Prescription drug and private duty nursing coverage

Prescription drug
Private duty nursing

Mental health care benefits
Mental health care coverage
Hospital confinements due to mental disorders
Hospital confinements due to mental disorders

covered the same as other illnesses

Selected coverages for mental health care
Coverage in special hospital

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

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

Other medical benefits
Second surgical opinion
Alcoholism treatment
Drug abuse treatment
Hearing care
Hospice care
Physical examinations

Section C
Deductible, coinsurance, and/or maximum benefit
provisions
Covered expenses
Deductible expenses



Table 46. Private pension plans:' Average replacement
large firms, 1984—Continued

rates for specified final earnings and years of service,’ medium and

Years of service

Final annual earnings
10 15 20 25 30 95 40
Combined private pension and primary” Social Security benefit
Production

$15,000 54.3 597 65.0 70.2 754 90.4 845,
$20,000 . 487 53.1 87.4 617 66.1 69.8 73.3
$25,000 .. 416 45.6 49.6 53.6 5875, 60.8 63.8
$30,000 .. 36.3 40.2 44.0 478 51.4 54.4 872
$25,000 .. 32.3 96.2 39.9 43.4 46.9 49.7 52.3
$40,000 . 29.2 32.9 36.5 40.0 43.3 46.0 48.4

+ Excludes supplemental pension plans.

2 Retirement annuity as a percent of earnings in the final year of work.
The maximum private pension available to an employee, not reduced tor
early retirement or joint-and-survivor annuity, was calculated under each
pension plan using the earings and service assumptions shown. This
tpenefit level was then expressed as a percent of earnings in the last year
of employment.

‘These calculations assume employees retired on January 1, 1984,
and final: earnings are for 1983. Eamings histories, necessary for

‘Table 47, Private pension plans:' Percent of full-time participants by minimum ag

normal retirement,’ medium and large firms, 1984

‘applying the pension formulas, were constructed for each final earnings
level based on data provided by the Social Security Administration.

For private pension formulas that are integrated with Social Security
(see table 44) and for computation of Social Security benefits, the worker
ig assumed to have retired at age 65 and paid into Social Security for 40
years. Computations exclude 4 percent of participants in money
purchase plans or plans with benefits based on career contributions.

2 Excludes benefits for spouses and other dependents.

e and associated service requirements for

Profes- Protas: | nical
sional {Technical sional | Techni
Produc- al) Produc-
Age and service requirements? | AL Par_ and ad. and Cer ton er-|| Age and sorvce requirements Ai pa | fc ("cak par | HON Pa
tive par. | ticipants | “pants tive par-| ticipante | SiPANtS
ticipants ticipants
Total 100 100 100 100 jjAge 61 iy] Oo oO 19]
No service requirement oO iy) oO o
No age requirement 7 8 9 25 20 years’ service 6 0 i) ro)
Less than 30. years’ service 1 1 1 0
0 YOars’ SENVICE nineenninen| 16 7 8 24 7 18 18 16
More than 30 years’ service ...| (‘) 1 Vv) 1 4 8 6 4
1-4 years’ service .. iy) o 3) o
Less than age 55 ) - - iw) 5 years’ service .. 1 1 iv)
30 yeats’ service ivy - - ie) 6-9 years’ service .. iy o -
40 years’ service .. 7 7 8
Age 55 5 8 4 4 11-14 years’ service .. 0 “0 “
5 or 10 years’ service 1 2 1 0 15 years’ service 1 1 1
20 years’ service 2 5 2 r0) 20 years’ service 1 O 1
30 years’ service ‘| 2 1 1 3 25 years’ service 1 1 1
More than 30 years’ service.) (") ) 0 0 30 years’ service 1 2 1
More than 30 years’ service...) (*) 0 1
Age 56-59 . 1 1 1 2
15 or 20 years’ service ... 1 - 0) 1 |/Age 63-64 1 3 1
More than 30 years’ service .. 1 1 0) 1 No service requirement .. ) i) i)
10 years’ service . 1 3 i)
Age 60 ..... 13 18 15 9
No service requirement 3 4 3 3 [lage 65 .. a7 32 39 38
1-4 years’ service 0 0 7) v) No service requirement . 33 30 36 33
5 years’ service 2 3 2 oO 1-4 years’ service iv - - is)
10 years’ servic 2 3 3 5 years’ service 1 1 1 1
11-14 years’ service o t) “ 10 years’ service . 3 2 2 4
18 years’ service .. 1 2 1 oO
20 years’ service “ “ 4 ||Sum of age plus service 9 14 W 6
25 years’ service fa) Oo “ “ Equals less than 60 ... 2 2 2 1
30 years’ service .. 5 4 Equals 80 1 1 1 “
More than 30 years’ service 1 1 1 ry Equals 85 4 ? 4 3
Equals 86-89 0 is) 1
Equals 90 or more .. 2 3 4 1

* Excludes supplemental pension plans.

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

> Ifa plan had alternative age and service requirements, the earliest
age and associated service were tabulated; if one alternative did not

specity an age, it was the requirement tabulated.
* Less than 0.5 percent.

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



Table 45. Private pension plan:
firms, 1984

Percent of full-time participants by maximum benefit provisions,’ medium and large.

Type of benefit formula*

Maximum benefit pr Total?

Terminal) Career | Dollar
‘earnings | earnings | amount

All participants
100 100
15 24
10

Not subject to maximum

Professional and administrative

Total 400 | 100 | 100 | 100

‘Subject to maximum’? 48 62 13 27
Limit on years of cr

service ... 40 64 10 20
2 2 - 4

1 1 - -

4 6 1 -

1 1 - -
13 7 2 10

1 1 - -
7 16 3 3

1 1 - -
7 9 3 4

i) iv) - -
10 13 4 7

Not subject to maximum

‘Type of benefit formula
Maximum benefit provision Tota? [Terminal Career | Dollar
earnings | earnings | amount
Technical and clerical
Total 4oo | 100 | 100 | 100
lSubject to maximum* 59 13 19
Limit on years of credit
i 54 9 16
3 - 1
2 i]
- - iv)
7 - -
o - -
18 4 6
1 - 0
13 2 3
1 - :
40 7 a 4
More than 40 .... rv) - -
(Other maximum” 10 8 4
Not subject to maximum a 87 at
Production
Total .. 400 | 100 | 100 | 100
Subject to maximum® .. 38 69 18 24
‘Limit on years of credit
service .. 26 46 12 18
Less than 20 2 5 - 1
20... 1 1 - 2
3 4 - 2
iy) iv} ~ -
4 20 7 7
1 2 - 1
6 12 4 3
1 1 - 1
1 2 0 2
iy) 0 - 1
14 26 8 8
INot subject to maximum .. 62 31 82 76

7” Excludes supplemental pension plans.

2 These maximum provisions are independent of ceilings on pen-
sions payable from defined benefit plans imposed by the Employee Re-
tirement Income Security Act.

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

* if a plan contained more than one benefit formula based on termi-
nal earings, career earnings, or dollar amounts, the formula containing
‘a maximum benefit provision was tabulated. If neither of the formulas
was affected by a maximum benefit provision, a primary formula was

selected and tabulated.

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

© Less than 0.5 percent.

7 The benefit yielded under the formula is limited to either a percent
of terminal or career earnings, often coordinated with primary Sociat Se-

ity payments, or to a flat dollar amount.

NOTE: Dash indicates no employees in this category.



Table 52. Private pension plan:

annulty increases,’ medium and large firms, 1984

Percent of full-time participants in plans granting ad hoc postretirement

Professional and i ‘ ;
, ‘ci ‘ Technical and | Production partici-
Characteristics All participants ae clerical participants pants
Total with at least one postretirement increase in
the 1979-83 period .. se 47 47 44 48
Number of increases granted In
past 5 years
Total 100 100 100 100
One .. aT 54 60 37
Two .. 18 18 15 19
Three 16 7 19 15
Four 7 4 3 I
Five or more .. 12 7 4 18
Provision for minimum increase In most recent
adjustment
Total .. 400 100 100 100
‘No minimum 8 5 69 85
With minimum 20 24 28 14
Monthly dollar amount 18 20 26 13
Less than $5.00 .. iv) iV) iy) -
$5.00 3 5 5 1
$10.00 5 5 10 3
$11.00-§14.00 2 1 1 4
$15.00 .. 4 5 6 4
$20.00 .. 1 1 1 iv)
$25.00 1 1 1 1
More than $25.00 .. 1 1 © i)
Varies by date of retirement iv) (a) ° iv)
Percent of present benefit 1 2 2 1
Greater of a monthly dollar amount or a
percent of present benefi 1 1 1 1
Not determinable 2 2 3 1
Provision for maximum increase in most
recent adjustment
Total 100 100 100 100
No maximum .. 87 53 a7 63
With maximum 42 45 50 36
Monthly dollar amount .. 12 15 17 8
$100.00 or less 3 4 5 1
$101.00-$150.00 .. 3 2 1 4
$151.00-$200.00 .. 2 1 5 1
More than $200.00 . 4 8 6 2
Percent of present benefit . 29 29 33 27
Less than 10 .... 15 13 18 14
10-14 .. Ww 12 10 10
15-19 . 1 (a) iy) 1
20-29 .. 1 1 1 i)
380 OF MOLE een 2 2 a 2
Greater of a monthly dollar amount or a
percent of present benefit 1 1 1
Not determinable 2 2 1

See footnotes at end of table.



Table 56. Length of service requirements for participation:’
Percent of full-time participants in sickness and accident
insurance, medium and large firms, 1984

Profes-
sional
and | cal and | Produc-

All par- | adminis-| clerical | tion par-

Length of service requirement I icipants

trative | partici- | ticipants
partic | pants
pants
Total .. 100 | 100 | 100 | 100
With service requirement ... 78 66 75 8t
1 month 25 27 29 24
2 months: 9 6 8 n
3 months 25 20 22 27
4-5 months 9 6 6 10
8 months 5 4 8 5
1 year 3 2 2 3
‘Over 1 year .. 1 1 2 iv)
Without service requirement 22 34 24 19
Service requirement not .
determinable ... ° - 1 -

* Length of time employees must be on the job before they are cov-
ered by a plan that is at ieast 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, Dash indicates no employees in this category.

Table 57. Length of service requirements for participation:’
Percent of full-time participants in long-term disability
Insurance, medium and large firms, 1984

Profes-
sional
and | cal and | Produc-

Length of service requirement | M18": |adminis-| clerical | tion par-
'PANts | trative | partici- | ticipants
partic | “pants
pants
Total 100 100 100
With service requirement 68 65 72 66
1 month W W W 10
2 months .. 3 3 2 5
‘3 months .. 4 15 16 13
4-5 months .. a 1 1 3
6 months 14 13 14 17
1 year 15 14 18 13
2 years 1 2 2 1
3 years .. 2 2 3 1
‘Over 3 years 5 5 6 4
Without service requirement 32 35 28 34

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

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

Table 58. Length of service requirements for participation:’
Percent of full-time participants in health insurance, medium
and large firms, 1984

Profes-
sionat | Techni-
and | cal and | Produc-
al Bat | adminis-| clerical Jon par-
icipants | trative | partici- | ticipants

partici | pants
pants

100 100 100

Length of service requirement

Total

With service requirement 56 42 50 67
1 month 20 18 7 23

2 months 7 3 4 10

18 12 19 20

3 1 1 5

8 7 7 8

4 1 1 1

Without service requirement .. 43 57 50 32

Service requirement not
determinable ..

* 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 actualstart 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 individuat items may not equal to-
tals.

Table 59. Length of service requirements for participa-
tion:’ Percent of fufl-time participants in basic life
Insurance, medium and large firms, 1984

Profes-
sional | Techni-
A par-| and | cal and | Produc.
Length of service requirement | MP9". |adminis-| clerical |tion par-
ipants | trative | partici- | ticipants
partici. | “pants
pants
Total 100 | 100 | 100
With service requirement 56 at 53 64
1 month 19 7 18 23
2 months. 8 2 5 12
3 months .. 18 14 22 19
4.5 months . 6 ty icy 1
6 months 7 6 7 8
7-44 months Q - - ry
1 year... 2 2 3 2
Over 1 year 1 iv 1 ie)
Without service requirement .......) 44 58 46 35

Service requirement not
determinable

io) (0) iy) 19)

* 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 tag between completion of the require-
ment and the actual start of participation. If the lag was 1 month or
more, it was included in the service requirement. Minimum age require-
ments are rare.

? Less than 0.5 percent.

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



Table 42. Private pension plans:' Percent of full-time participants in plans with percent

by type and amount of formula, medium and large firms, 1984

t of career earnings benefit formulas

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 | ota) benefit
formula? Without formula? Without
Subject | Not sub- [With inte-] “inte. Subject | Not sub- |With inte-} "n1g-
tomaxi-| jectto | grated | crated to maxi- } jactto | grated | crated
mum |maximum| formula | rn mum [maximum] formula | formuta
Professional and
All participants administrative
Total . 100 100 100 100 100 Total 100 100 100 100 100
Flat percent per year of Flat percent per year of
service 36 49 35 9 97 || sence... 45 a1 45 7 98
Less than 1.00 . 2 8 1 - 6 Less than 1.00 2 2 2 - 4
1.00-1.24 3 9 3 - “1 1 5 1 - 4
1.25-1.49 6 28 5 5 10 4 33 3 4 6
1.50-1.74 24 - 23 1 68 35 - 37 6 85
1.75-1.99 3 2 3 4 1 2 - 2 3 -
2,00-2.24 ... 1 - 1 - 2 Oo - oO - 1
Percent per year [Percent per year
varies « 64 51 65 1 3 || varies 55 59 55 93 2
By service . 2 u 2 2 3 By service 2 8 2 2 2
By earnings 62 40 64 89 - By eamings .. 53 51 83 91 -

* Excludes supplemental pension plans.
2 Ifa plan contained more than one career earings formula, a primary
formula was selected and tabulated. Table includes plans with career
earnings formulas that serve as an alternative to a terminal earings for-

mula.

2 These maximum provisions are independent of ERISA-imposed ceil-

Table 43. Private pension plans:' Percent of ful

amount of formula, medium and large firms, 1984

ings on pensions payable from defined benefit plans.

* Less than 0.5 percent.

NOTE: Data were insufficent to show technical-clerical and production
workers separately. Because of rounding, sums of individual items may

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

time participants in plans with dollar amount benefit formulas’ by type and

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 maximurn} maximum |to maximum
All participants Production
Total .. 100 100 100 Total ... 100 100 100
Flat monthly amount per year of Fiat monthly amount per year of
75 at 73 service 7 82 75
O - 1 Less than $5.00 iv) - 1
19 25 18 $5.00-$9.99 21 24 20
18 32 4 $10.00-$14.99 20 32 16
$15.00-$19.99 30 8 36 $15.00-$19.99 28 9 34
'$20.00-$24.99 4 7 3 $20.00-$24.99 4 6 3
$25,00-$29.98 ... 2 5 1 $25.00-$29.99 2 5 1
$30.00 or greater 2 6 1 $30.00 or greater 2 6 1
‘Amount per year varies by service ... 5 5 5 |Amount per year varies by service .... 5 4 6
Amount per year varies by |Amount per year varies by
earnings .. i. 20 14 22 eamings .. 18 14 19

* Excludes supplemental pension plans.

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

2 These maximum provisions are independent of ERISA-imposed ceil
ings on pensions payable from defined benefit plans.

* Less than 0.5 percent.

NOTE: Data were insufficient to show professional-administrative and
technical-clerical workers separately. Because of rounding, sums of indi
vidual items may not equal totals, Dash indicates no employees in this

category.



Table 1. Summary: Percent of full-time employees by Table 2. Work schedule: Percent of full-time employees by |
Participation’ in employee benefit programs, medium and number of hours scheduled per week,’ medium and large
large firms,’ 1984 firms, 1984 |
i Profes- Protes- i
i sional | Techni- sional | Techni-
i Alem cal and | Produc- ‘Altem. |. 27d. | cal and | Produc- |
! Employee benefit program ovens clerical | tion em- Work schedule ployees |20minis-| clerical | tion em- i
Ployees | trative | employ- | ployees trative | employ-| ployees i
4 employ-| ees employ-| ees
ia ees, -} ees
EP Total... . 100 |. 100 | 100 | 100
Hh 99 99 | 400 98 !
‘i 99 99 | 100 99 Hours per week:
i Personal leave 23 29 34 15 1 ty) iv) 1
i Lunch period .. 9 3 4 16 3 5 7 1
4 Rest time 73 59 73 80 1 2 2 1
' Sick leave 67 92 92 42 7 8 12 3
: 2 3 5 ro)
85 80 73 94
Sickness and accident insurance 51 29 37 70 ie) 1 i) 0)
{; 3 Wholly employer financed .. 42 20 27 61
fa Partly employer financed 10 9 10 10 Hours per week not available .. fe) ral a 0
Longa ety mmsaen mn] a7 | at | ot | gq sue din iid arate fo ed ha
; Wholly employer financed 35 47 42 26 cluded from this survey. 7
: Partly employer financed an 20 16 5 ® Less than 0.5 percent.

Health insurance*
Employee coverage:

97 98 95 97

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

Wholly employer financed 62 87 48 a”
Partly employer financed 35 | 44 47 26
Family coverage:
Wholly employer financed 4 39 32 46
Panlly employer financed . 56; 59 | 84 | 60 Table 3. Paid lunch time: Percent of full-time employees
by minutes of paid lunch time per day, medium and large
Life insurance 96 97 95 96 firms, 1984
Wholly employer financed* 81 80 78 83
q Partly employer financed . 15 17 17 12 Profes- i
| sional | Techn-| radu,
| Allem-| and |eal and) tion
4 Retirement pension 82 83 84 80 Minutes per day ployess| 22min- | clerical |, tion
‘ Wholly employer financed* 74 74 78 72 82S |strative|employ-| mes.
Partly employer financed ..... 8 9 6 8 lemploy-| ees
ees
* Participants are workers covered by a paid time off, insurance, or Total .. 100 | 100 | 100 | 100

Pension plan. Employees subject to a minimum service requirement be-
fore they are eligible for a benefit are counted as participants even if they Provided paid lunch time

have not met the requirement at the time of the survey. If employees are Under 20 minutes ; o +) 18
required to pay part of the cost of a benefit, only those who elect the cov- 20 minutes 3| 0 ° 6
erage and pay their share are counted as participants. Benefits for which ‘Over 20 and under 30 tinutos o!l alo 1
the employee must pay the full premium are outside the scope of the sur- 30 minutes : 4 A ,
vey. Only current employees are counted as participants; retirees are ex- Over 30 minutes ~ 1 1 210
cluded even if participating in & benefit program. Number of minutes not

* See appendix A for scope of study and definitions of occupational evalable olole .
groups.

»  ncludes less than 0.5 percent of employees in plans that did not of Noy provided paid Junch time ... | 97} 96! a6

fer family coverage.

* Includes participants in noncontributory basic plans who may contrib-
ute to the cost of supplemental plans in these benefit areas, Supplemen- * Less than 0.5 percent.
tal plans are not tabulated in this bulletin.

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



Table 26. Health insurance: Percent of full-time participants in plans-with dental benefits by extent of coverage for
selected procedures, medium and large firms, 1984

Sches Incon-| Sub- Percent of usual, customary, and reasonable charge Not
Type of dental procedure | Total | cash |. We, [lect to cov-
alow. [C75 /PA¥-| Total} 50 | 60 |61-74| 75 | 80 | 85 | 90 | 91-99] 100 | ered
ule’ | ment®
ance
Alt participants
Examinations 100 | 16 2/0 | 2] a] 1 2] 24 1 1] - 53} 0)
Dental X-rays 100 16 2/0 82 | 0) r?) 1 2 27 4 6 - 41 (7)
Fillings 100 | 27 2; 0 | 7 4 1 2 5 | 42 5| 6] - 5| 0
Dental surgery 100 26 210 1 5 1 2 5 4t 4 6 - 5 1
Periodontal care 100 | 27 2/ @ | 70 7 1 1 5 | 40 s| 6] - 4 1
Inlays 100 | 27 1] @ | 70 | 39 5 2 1] 13 3 6| - 2 2
Crowns 00 | 27 1 1 {| 70 | 39 5 2 1 | 12 3 6| - 2 1
Orthodonti too} 12] - 1 | 59] 51 3 110 2 1) 9 ) @ 1 | 2
Professional and
administrative
Examinations 100 | 19 2| @ | 7 1/0 1 a} 2] @ a] - s1| @
Dental X-rays 100 | 20 2] @ | 79 1] 0 2 3 | 26 1 3] - 4a}
Fillings 100 30 2 e) 68 3 1 2 5 45 3 3 - 5 ie)
Cental surgery 100 | 29 1; @ | 6] 4 1 2 5] 45 3 3] - 5 1
Periodontal care 100 30 1 e 68 7 1 2 4 43 3 3 - 4 1
intays too | 30] | ( | 68] 41 6 2 2| 12 1 3} - 2 1
‘Crowns: 100 30 e 1 68 ai 6 2 2 1 1 3 - 2 1
‘Orthodontia 100 16 - 1 sa] 49 4 1 (0) 2 1 - ° 1 25
Technical and clerical
Examinations .. 100 14 210 83 17; @ 1 1 2a} 1 - 40) ()
Dental X-rays .. 100 15 2 iw) 83 1 e 2 t 32 1 3 - 42 t)
Fillings 100 | 27 2/ @ | 71 4 1 2 5 | 49 3 3] - 4| @
Dental surgery oo | 26 2 a] 7 4 1 3 4 | 49 3} 3] - 4 1
Periodontal care 100 | 27 2 1] 69 7 1 2 4] 48 3s} 3] - 5 1
Inlays 100 | 27] @ 7) 71 43 6 3 1 13 1 3] - 1 2
Crowns 100 | 27 1 1 | 70 | 43 6] 3 1] 12 1 3] - 1 1
Orthodontia 100 14 - 1 56 | 48 3 1} 0 2 1 - 0) re) 29
Production
Examinations ...... 100 15 2; 0 83 | () i?) ivy 2 23 1 1 - 56 | 0)
Dental X-rays . 100 | 15 2/0] 3/0] 0 1 2) 2 6| io] - 40} 0)
Fillings . 100 26 2 i) 72 6 1 1 6 36 7 10 - 6 0
Dental surgery 100 | 25 2) @ | 72 6 1 1 6 | 36 6} 10} - 7 1
Periodontal care too | 25 21 0 | 7 7 1 1 6 | 36 7] 10] - 4 1
100 | 26 11 | 71) 36 4 1 1] 13 5]; 9] - 2 2
100 | 26 1} @ | 71 | 36 4 1 1| 13 5| 9] - 2 2
too | 10 | - 1 | 62} 53 3 2/0 1 110] 0 i | 28
* Reimbursement arrangement in which the percentage of dental > Less than 0.5 percent.
expenses paid by the plan increases if regular dental appointments
are scheduled. NOTE: Because of rounding, sums of individual items may not

* Participant pays a specific amount per procedure and plan pays equal totals. Dash indicates no employees in this category,
all remaining expenses.



Appendix B: Availability of
the Survey’s Data Base

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

For major benefit items, the BLS survey obtained
plan provisions and employee participation data for each
of three employee groups (professional-administrative,
technical-clerical, and production workers). Informa-
tion on employer costs was not collected. The magnetic
tapes, which consist of a control file and plan data files
for each benefit area, may be used to derive national
estimates, similar to those published in this bulletin, for
other items on the data base. For some data items not
presented in this bulletin, however, the datafile is insuf-
ficient to produce reliable national estimates, because
either information on the provisions frequently were
not available or the number of employees with the pro-
vision was very small. Moreover, the tapes cannot yield
reliable estimates for individual industries, geographic
regions, or establishment size classes. Full documenta-
tion accompanies the tapes, including examples of esti-
mating formulas. Although Bureau staff will respond
to any questions concerning the content of the tapes,
technical assistance in developing estimates cannot be
provided to purchasers due to the heavy workload as-
sociated with the survey program.

Data users can purchase tapes with details of plans
for one benefit area or all, i.e., health, life, sickness and
accident, and long-term disability insurance; private re-
tirement pensions; and paid time-off provisions——lunch
time, rest periods, holidays, personal leave, vacations,
and sick leave. (Table 66 presents all of the information
that was collected on the other benefits surveyed.) The
plan data file contains provisions for each plan which
was reported and for which usable information was
available. However, plan identification numbers on the

|

67

tape are scrambled (and other identifying information
is removed) to protect the confidentiality of respond-
ing establishments.

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

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

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

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

Employee contribution for employee and
dependents’ benefits
Percent paid or monthly contribution



Contents—Continued

Page
4. Health insurance: Selected types of medical care 8
5. Trends in wholly employer-financed health insurance, 1980-84 ... 9
Replacement rates under pension plans based on 30 years of service, medium and
large firms, 1984:
6. Average benefits including and excluding Social Security payments ................ 13
7. Average benefits under private plans by type of pension formula .................. 13
Tables:
Percent of full-time employees (or participants), medium and large firms, 1984:
1. Summary: Participation in employee benefit programs . 18
2. Work schedule: Number of hours scheduled per week . . 18
3. Paid lunch time: Minutes per day. .. 18
4. Paid rest time: Minutes per day .. 19
5. Paid holidays: Number of days provided each year... 19
6. Paid holidays: Policy on holidays that fall on regularly scheduled day off 19
7, Paid vacations: Amount provided at selected periods of service ... 20
8. Paid holidays and vacations: Average number of days ..... 21
9. Paid vacations: Length of service required to take vacation . . . 2
10. Paid personal leave: Number of days provided per year ............-+eeeee eee eees 21
11. Short-term disability coverage: Participation in sickness and accident
insurance plans and paid sick leave plans 22
12. Paid sick leave: Type of provision . . 22
13. Paid sick leave: By provision ...... 23
14. Paid sick leave: Average number of days at full pay by type of plan . . 24
15. Paid annual sick leave: Average number of days by accumulation
policy and sickness and accident insurance coordination 25
16. Sickness and accident insurance: Type and duration of payments .. 26
17. Sickness and accident insurance: Percent of earnings formula by
maximum weekly benefit 28
18. Long-term disability insurance: Method of determining payment 29
19. Long-term disability insurance: Duration of benefits 29
Health insurance:
20. Coverage for selected categories of medical care 30
21. Basic hospital room and board coverage by type of benefit payments. 32
22. Basic surgical benefits by maximum allowance for selected procedures 33
23. Major medical coverage by amount of deductible and applicable benefit period . 34
24, Major medical coverage by coinsurance provisions 34
25. Major medical coverage by maximum benefit provisions 35
26. Dental benefits by extent of coverage for selected procedures . 36
27. Dental benefits by deductible provision 37
28. Dental benefits by yearly maximum amount of insurance 37
29. Orthodontic benefits by lifetime maximum amount of insurance 37
30. Vision benefits by extent of benefits ...............00 eee 37
31. Mental health benefits by extent of benefits .. . 38
32. Coverage for selected special benefits ........ 38
33. Contributory plans by type and amount of employee contribution . 39
34, Funding medium for selected types of coverage. . 40



Bureau of Labor Statistics

Regional Offices

Ag cAN S

REGION Vill

REGION VI

REGIONH

SUERTE CO sre

WAG SLANLS

Region !
John F. Kennedy Federal Building
Government Center
Boston, Mass. 02203
Phone: (617) 223-6761

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

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

Region {V
1371 Peachtree Street, N.E.
Atlanta, Ga. 30367
Phone: (404) 881-4418

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

Region VI
U.S. Department of Labor
Bureau of Labor Statistics
Federal Building
525 Griffin St., Rm. 221
Dallas, Tex. 75202
Phone: (214) 767-6971

Regions VU and VIII
911 Walnut Street
Kansas City, Mo. 64106
Phone: (816) 374-2481

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

i
i
|


Coinsurance by the amount of incurred expenses

Coinsurance by the number of days/visits

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

Maximum number of days/visits for specified
expenses

Maximum dollar payable for specified covered
expenses

Section C questions are designed to identify and de-
scribe the benefit provisions of covered expenses in sec-

69

tion B that are subject to deductible, coinsurance,
and/or maximum benefit provisions. This section con-
sists of 15 sets of seven questions. One set of questions
is completed for each covered expense, or group of
covered expenses, with identical deductible, coinsur-
ance, and maximum benefit provisions. In the first ques-
tion of each set, a group of expenses with common pro-
visions is identified. The remaining six questions give
the benefit provisions for the group. Additional sets of
questions are completed until the benefit provisions of
all covered expenses have been described.

U.S, GOVERNMENT PRINTING OFFICE: 1985-461~566:3647%



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

large firms, 1984

Professional and Technical and clerical 5 ,
All participants administrative participants participants Production participants
Method With | Without With | Without With | Without with | Without
maximum | maximum maximum | maximum maximurn| maximum maximum | maximum
Total |coverage|coverage| Total |coverage|coverage| Total |coverage|coverage| Total | coverage | coverage
provi- | provi- provi- | provi j- | provir provi | provi-
sions’ sions sions! sions sions sions' sions
‘All methods 100 m 29 | 100 72 28 | 100 75 25 | 100 67 33
Fixed percent of earnings 7 6 16 83 62 24 82 64 18 67 87 9
Less than 50 percent 1 1 1 1 1 1 1 1 ® 2 1 1
50 percent 23 18 5 23 16 7 Al 16 5 25 23 3
55 percent .. 0) iy) 19) - - - i) 19) 10) 1 1 -
60 PerCEM enn 40 32 8 45 35 10 47 a7 10 28 24 4
65 or 67 percent . 10 9 1 " 9 2 9 8 1 9 9 1
70 percent or more 2 1 1 2 1 1 3 4 1 1 re) (o)
Percent varies by eamings cwn| 8 6 2 9 6 2 12 10 3 4 3 1
Percent varies by service 1 iv} 1 1 ¢) 1 1 e) 1 1 1 e)
‘Scheduled dollar amount
varies by earnings .. 8 2 7 1 1 - 1 1 o) 24 3 20
Other’. 5 2 3 6 2 4 3} ® 3 5 3 2

* Inchides dollar maximums in plans that pay a percent of earnings,
ceilings on income during disability that limit the amount payable from
the LTD plans plus other income, or a combination of both.

? Less than 0.5 percent.

° Includes flat dollar amounts and scheduled percent of earnings

varying by length of disability.

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

totals. Dash indicates no employees in this category.

Table 19. Long-term disability insurance: Percent of
full-time participants by duration of benefits, medium and

large firms, 1984

Protes-
sional | Techni-
All par- |_a0d_ | cal and | Produc-
Duration of benefits aot | @dminis-| clerical |tion par-
i trative | partici- | ticipants
partici- | pants
pants
Total en 300 | 100 | 100 } 100
Until a specified age ... 26 24 27 27
Under age 65 io) a) 0) oO
Age 65 .. 23 24 23 25
Age 70 3a 3 3 2
Duration of benefit varies 66 68 66 65
By length of service... 1 1 1 1
By age at time of disabill 66 67 65 64
Single reduction ... a4 as | 31 7
Gradual reduction 31 32 34 a7
. 8 8 7 8

* Less than 0.5 percent.

2 Under the Age Discrimination in Employment Act, age-based reduc-
tions in employee benefit plans are permissible when justified by signifi-
cant cost considerations.

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

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

29



and.15 years) and two monthly pension amounts ($250
and $1,000) in effect on December 31, 1978. These in-
creases were then averaged using as weights the num-
ber of active workers participating to provide sur-
veywide estimates for each example. As shown in the
tabulation below, the length of retirement was a signifi-
cant factor in determining the size of pension adjust-
ments, with larger increases paid to persons retired
longest: Also, where maximum increases were speci-
fied, retirees with higher original pensions had lower
percentage increases.

Monthly pension on Years of retirement
December 31, 1978 5 10 15
$250:
Average pension on December 31, 1983 . $286 $307 $316
Percent change, December 31, 1978-83 .. 4 23 26
$1,000:
‘Average pension on December 31, 1983 . $1,093 $1,172 $1,204
Percent change, December 31, 1978-83 . . 9 7 20

The BLS Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) rose 52 percent
over the 5-year period studied.” Retirees in plans with
ad hoc adjustments, therefore, were commonly granted
increases that were less than half of the price rise.

Only about 3 percent of all participants were in plans
that provided for automatic increases in pension bene-
fits to compensate for increases in the cost of living. In
most instances, the cost-of-living-adjustment formulas
provided for benefit adjustments proportional to in-
creases in the BLS Consumer Price Index. Neverthe-
less, ceilings on individual increases limited. periodic
adjustments to 3 percent or less for one-half of the cov-
ered workers. Most of the affected participants were in
plans calling for annual adjustments. Lifetime ceilings
on increases were rare.

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

The CPI-W increased 51 percent between 1978 and 1981, the
highest 4-year rise in recent times. For a discussion of postretirement
increases during this period, see Donald G. Schmitt, “Postretirement
Increases under Private Pension Plans,” Monthly Labor Review, Sep-
‘tember 1984, pp. 3-8.

to exclude years of service before age 22 in determin-
ing vesting eligibility.” :

Unreduced vested pension payments begin at a plan’s
normal retirement age, based on the benefit formula in
effect when an employee left the plan. Also, terminated
and vested participants could receive a reduced pension
under a plan’s early retirement provision if the partici-
pant had satisfied the corresponding service require-
ment when leaving the plan.

For terminated and vested employees who wish to
receive a pension beginning at the early retirement age,
the benefit must be at least the actuarial equivalent of
what would have been received starting at age 65. Al-
though under ERISA the reduction factor used in de-
termining the pension for a terminated employee can
be more severe than for early retirement, the same fac-
tor was used in plans covering 79 percent of the par-
ticipants with early retirement provisions.

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

Joint-and-survivor annuities are based on an actuarial
or arithmetic reduction of the employee’s pension which
is necessary to allow for continuation of benefits to the
employee’s survivor. One-fifth of the participants were
in plans offering only a joint-and-survivor option that
provides a surviving spouse 50 percent of the retiree’s
adjusted pension. Nearly two-thirds of participants had
a choice of two or more alternative percentages (fre-
quently 50, 67, and 100 percent) to be continued to the
spouse, with corresponding reductions in their annuities.

fn 1984, President Reagan signed into law the Retirement Equity
Act, effective January 1, 1985. Among other provisions, this act
amended ERISA by lowering to 21 the age after which employers
must enroll workers in pension plans and lowering to 18 the age after
which employees must earn vesting credits. In addition, the act re-
quires that the spouse of a deceased vested employee be entitled to
survivor benefits regardless of age at death. This bulletin reports on
provisions in effect the last year before plans must comply with the
new requirements. (Collectively bargained plans must comply by
January 1, 1987.)

2 ERISA requires that the joint-and-survivor coverage be automatic
for married retirees, and that waiver of this option must be requested
in writing by the employee. The Retirement Equity Act (see foot-
note 20) further directs that spouse coverage can be waived only if
both husband and wife sign the written request. For a more complete
discussion of survivor benefits, see Donald Bell and Avy Graham,
“Surviving Spouse's Benefits in Private Pension Plans,” Monthly La-
bor Review, April 1984, pp. 23-31.

|
|



Table 8. Paid holidays and vacations: Average number of Table 9. Paid vacations: Percent of full-time participants by
days for full-time participants, medium and large firms, Jength of service required to take vacation, medium and
large firms, 1984

1984
Profes- ; Protes-
sional |Techti-| p-oguc- sional | Techné-
All par-| and [cal and]! "fo All and | cal and | Produc-
ttem tice | admin- | clerical) 5 nic. Length of service requirement Pat, |adminis-| clerical |tion par-
pants |istrative| partici | PAT ticpants|Wtive’ | an | teipents
partic) pants | P partic | pants
pants pants
Paid holidays ... 98 | 100 | 97; 98 Total oo | 100 | 100 | 100
i
Paid vacation by length of service: With service requirement .. 97 95 97 98 i
At6 months: 3.3 46 40 23 1 month .. 7 10 40 5 t
Att year as | 103 | 95 | 74 2 months 2 4 2 2
ALG years 10.4 | 11.0 | 104 | 100 3 months 10 10 10 9
ALS years 125 | 134 | 129 | 11.7 4-5 months 2 1 2 3
At 10 years 156 | 164 | 158 | 15.1 6 MONTHS ne 38 48 47 28
At 15 years 18.2 | 189 | 187 | 176 7-41 months . 1 1 2 1
At 20 years 205 | 21.1 | 20.7 | 202 1 year. 36 22 23 50
At 25 years 223 | 227 | 225 | 220 Over 1 year .. iu) - ) )
At 30 years’ p28 | 233 | 230 | 225
Without service requirement 3 5 3 2
+ The average (mean) was essentially the same for longer lengths of Service requirement not determin- nu
service, able ... 1) iy) v) i) i

NOTE: Computation of average included half days and excluded

workers with zero holidays or vacation days. * Less than 0.5 percent.

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

Table 10, Paid personal feave: Percent of full-time t
employees by number of paid personal leave days provided fj
per year, medium and large firms, 1984 H

Profes-
sional | Techni-
‘allem. |_270_ | cal and | Produc-
Number of days Ployeos |2¢minis| clerical | ion em-
trative | employ- | ployees
employ-| ees
ees |
Total .. yoo | 100 | 100 | 100
Provided personal leavé 23 29 34 45
1 day. . 2 2 a 2
2 days .. 5 7 9 2
3 days «. 2 a 3 2
4 days 4 4 5 3
5 days — 4 7 6 2
More than 5 days... 1 2 2 1
No maximum specified’ ..... 3 5 4 1
Varies by length of service 2 1 2 2
Not provided personal leave evn 77 n 66 8S

* Workers were provided as much personal leave as they needed.

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

21



Insurance and pension plans for white-collar workers
usually resulted from management decisions, while plans
for production workers were divided between union-ne-
gotiated and nonunion arrangements.

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

Other benefits

(table 66)

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

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

Profit sharing, savings,

and stock ownership

plans—capital accumulation instruments providing cur-
rent or deferred benefits—have increased in availabil-
ity for each occupational group nearly every year since
first measured in 1980. Growth between 1983 and 1984
was particularly striking in eligibility for savings plans

among white-collar workers—employers offered to
match savings for nearly half of these employees in
1984. This growth was influericed by the “salary re-
duction” feature of recent tax legislation, which allows
the investment of employees’ pretax earnings in ap-
proved plans.”

Incidence of several benefits differed markedly by
employee group, with a larger proportion of profes-
sional-administrative employees usually covered. For
example, full or partial payment of relocation expenses
for transferred or newly hired employees was available
to three-fourths of the professional-administrative em-
ployees but to less than two-fifths of the technical-cleri-
cal employees and one-fifth of the production workers.
Severance pay was offered to three-fifths of the
white-collar employees, almost twice the proportion of
production employees covered.

For six benefits, the data distinguish between full and
partial defrayment of the cost of the benefit to the em-
ployee. Parking, for example, was nearly always free
to those employees eligible for the benefit. Conversely,
meals served in a cafeteria or other dining facility were
generally provided at reduced cost, rather than free, to
those eligible. Fully paid relocation allowances, more
common among eligible white-collar employees, in-
cluded payments for moving and interim living ex-
penses, and the cost of breaking a lease or selling a
house. Covered production workers were more often
eligible for only partial defrayment of relocation ex-
penses, generally limited to moving costs, or limited to
a maximum dollar amount.

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

25 For details on salary reduction arrangements, see the Revenue
Act of 1978 and subsequent IRS regulations.



Table 20. Health insurance: Percent of full-time participants by coverage for selected categories of medical care, medium |
and large firms, 1984
Care provided
5 Care not
Category of medical care Total al By basic By major et, basic 4 provided
I fl benefits only’ | medical only’ | Sr pegicay
i
Alt participants
i Hospital room and board 100 100 7 28 54 0 :
Hospitalization—miscellaneous services 100 100 16 29 54 i
Outpatient care* 100 100 12 27 60 r7)
Extended care faci 400 62 24 28 "1 38
Home health care* 100 46 22 16 9 54
Surgical 100 100 92 29 39 ro)
Physician visits—in hospital 400 100 12 43 38 iv)
Physician visits—oftice 100 96 G 83 7 4
Diagnostic X-ray and laboratory* 100 100 25 42 33 (9)
Prescription drugs—nonhospital 100 98 14 at 3 2
Private-duty nursing 100 96 6 89 1 4
fl Mental health care 100 99 10 28 61 1
Ei Dental 400 77 72 5 - 23
t Vision 100 30 26 4 iv) 70
Professional and administrative
Hospital room and board .. 100. 100 16 32 52 0)
Hospitalization——miscellaneous services - 100 100 15 33 51 i)
Outpatient care* .. 100 100 9 30 61 e
Extended care fac 100 66 22 31 13 34
Home health care® 100 48 20 18 10 52
i Surgical 100 400 31 33 36
Physician visits—in hospital 100 100 "1 58 32 fel
il Physician visits—ottice ... 100 99 7 88 4 1
i Diagnostic X-ray and laboratory® 100 100 23 49 28 a)
eu! Prescription drugs—nonhospital 100 98 12 82 4 2
Private-duty nursing 100 99 7 94 1 1
Mental health care 100 100 8 3t 60 io)
! Dental 100 73 74 5 - 2t
i Vision 100 26 at 5 0 74
i Technical and clerical
i
i Hospital room and board .. 400 100 16 32 51 (a)
q Hospitalization— miscellaneous services . 100 100 14 33 52 Qo
i Outpatient care‘ 100 100 40 cy 59 a)
Extended care facility’ . 100 63 18 nu 13 37
Home health care* 100 47 18 18 1 53
Surgical 100 400 32 33 35 iy)
Physician visits—in hospital 400 100 "1 - 56 32 a)
Physician visits—office 100 99 7 87 5 1
Diagnostic X-ray and taboratory* 400 100 23 48 29 e)
Prescription drugs~-nonhospital 100 97 W 84 3 3
Private-duty nursing 100 99 7 89 2 1
Mental health care 100 99 8 32 60 1
Dental . 100 5 70 5 - 25
Vision ... 100 26 at 5 ia) 74

See footnotes at end of table.



similar final earnings who had 25 or more years under
Social Security.)

Chart 6 displays replacement rates based on 30 years
of service for each of the earnings assumptions. Except
for the lowest earnings assumption ($15,000), the pri-
vate pension plan replaced on average about 27 percent
of the final year’s earnings; the rate for $15,000 was
about 31 percent.

When combined with primary Social Security pay-
ments available at age 65, however, replacement rates
differed substantially as earnings increased—ranging
from nearly three-fourths at the lowest assumed level
to just under one-half at the highest earnings level com-
puted. Except for the two highest assumed levels of fi-
nal earnings ($35,000 and $40,000), the primary Social
Security benefit was larger than the average private
pension.

Although private pension replacement rates for all
employees changed little as the final earnings assump-
tion increased, rates for production workers dropped
10 percentage points. Chart 7 provides an explanation:
Half of all production workers have dollar amount for-
mulas, paying workers with the same years of service
the same benefit, regardless of earnings history. The
result is a sharp decrease in the replacement-rate as fi-

nal earnings increase. Average replacement rates for”

earnings-based formulas, on the other hand, increase
slightly with higher final earnings, the result of Social
Security integration in most of these plans."*

Normal retirement. Although full Social Security
benefits are not available before age 65, most private
pension plan participants were not required to work to
that age for full private pensions (normal retirement).
Thirty-seven percent were covered by plans that speci-
fied age 65 as the earliest age for normal retirement.
While these employees generally did not have to sat-
isfy a minimum service requirement, plans permitting
normal retirement at earlier ages typically had length-of-
service requirements. Ten years’ service or less gener-
ally were required for the 31 percent of participants
who could first retire at ages 60 through 64; 20 or 30
years were typically needed for retirement at 55 through
59 (affecting 6 percent of participants); and another 10
percent could qualify when the sum of age plus service
reached a specific amount, such as 85.

Sixteen percent of all participants were covered by
plans permitting retirement at any age with 30 years of
service; the major concentration (24 percent) was
among production workers. Plans which featured such
a provision almost always offered other normal retire-
ment opportunities at specified ages with lower service
requirements. (If a plan had alternative age and service
requirements, the earliest age and associated service

“A more complete discussion of replacement rates will be presented
in an upcoming Monthly Labor Review article by Donald G. Schmitt.

were tabulated for this survey; if one alternative did
not specify an age, it was the formula tabulated.)

Early retirement. Virtually all of the employees par-
ticipating in a pension plan could retire early and re-
ceive an immediate, reduced pension. In some cases,
employer approval was required for early retirement
benefits. :

The amount of an early retirement pension is lower
for three reasons: First, fewer years of service are ap-
plied to the benefit formula because an employee has
not worked until normal retirement age. Second, be-
cause benefits begin at an earlier age, the retiree is ex-
pected to receive plan payments over a longer period
of time. Third, pension funds are less, thereby lowering
earnings on investments.

The normal benefit is reduced by a percentage for
each year between the actual and normal retirement
ages. If a plan’s normal retirement age is 62, for exam-
ple, and the reduction factor is 6 percent, a person re-
tiring at age 59 would receive 82 percent of the normal
formula amount. It should be recognized, however, that
in addition to the 18-percent reduction for early retire-
ment, the annuity in this example would be based on
fewer years of service and possibly lower earnings than
at age 62. :

The reduction may either be uniform or vary by age
or service. Reduction factors that differed for each year
of early retirement, based on the employee’s life expec-
tancy at that age (actuarial reductions) were used in
plans covering one-fifth of participants with early re-
tirement opportunities. Other methods of reduction,
however, often approximate .an actuarial reduction. For
over a third of the participants, the reduction factor
differed for age brackets of several years instead of
changing each year. Two-fifths of the participants had
uniform reduction factors, most commonly 6 percent
for each year of early retirement. A few plans applied
reduction factors that vary by length of service.

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

The early retirement pension for 11 percent of par-
ticipants was supplemented by additional monthly pay-
ments if employees retire after meeting specific condi-
tions. Plan sponsors include these special early retire-
ment benefits either to induce older workers to retire
or as a reward for long service. For most employees in
this study, at least half of their retirement pension will
be Social Security payments (see section on replace-
ment rates). Supplemental benefits from the private pen-
sion help to fill the gap during the period between re-
tirement and the start of Social Security payments. Gen-

i
i



Table 53. Private pension plans:' Percent of full-time
participants by vesting provisions, medium and large firms,
1984

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

Provision cet, [adminis-| clerical |tion par-
Pe trative | partici- | ticipants
partic | pants
pants
Total® too | 100 | 100
Cliff vesting? with full vesting after:
10 years of service at any age... 66 | 63 | 59 | 72
10 years of service atter
age 22 19 | 20 | 24 16
Other 4 5 6 2
Graduated vesting.’ with full vesting
atter:
15 years of service 4 4 5 2
Othert 10} 10 | 12 8

* Excludes supplemental pension plans.

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

* Under a cliff vesting schedule, an employee is not entitled to any
benefits accrued under a pension pian until satisfying the requirement for
100 percent vesting. The Employee Retirement income Security Act
(ERISA) specifies 10 years es the maximum requirement for this form of
vesting.

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

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

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

Table 54. Private pension plans:' Percent of full-time
Participants by provision for postretirement survivor annuity,
medium and Jarge firms, 1984

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

All par-

Type of annuity for surviving spouse | cists

Total .. 100 100 100 100

Postretirement survivor annuity

provided .. 100 100 100 100

‘Spouse’s share of joint-and-sur-

vivor annuity? only .. 90 92 94 86
50 percent of retiree’s
pension 20 15 16 24
51-99 percent of retiree’s
pension 6 5 3 9
100 percent of r
pension 1 i?) 0) 1
Altemative percentages at
retiree's option er) 72 74 53
Spouse's share of joint-and-sur-
vivor annuity plus portion of
tetiree’s pension 5 3 1 8
Portion of retiree’s accrued
Pension only 5 5 5 6

Postretirement survivor annuity not

provided* ® ° a) iv)

' Excludes supplemental pension plans.

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

* Less than 0.5 percent.

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

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



50 to 70 percent of pay. Short-term disability protec-
tion was available to 94 percent of all employees in the
survey, including 24 percent covered by both sick leave
and sickness and accident insurance. Paid sick leave
was most often provided to white-collar workers, while
sickness and accident insurance was more often a bene-
fit for production workers.

Employers coordinate sick leave benefits with sick-
ness and accident insurance either by starting insurance
benefits after sick leave pay has ended, or by paying
both benefits concurrently. When payments are made
from both sources, sick leave pay is reduced by the
amount of the insurance benefits so that the total bene-
fit does not exceed full salary. Regardless of the link-
age approach, employers offering sickness and accident
insurance tend to allow fewer sick leave days than those
without such insurance. At 5 years of service, for ex-
ample, annual sick leave plans coordinated with insur-
ance averaged 15 days at full pay—23 days fewer than
similar plans without insurance. This gap widened as
years of service increased.’

Sick leave plans. Seventy-two percent of the employ-
ees covered by paid sick leave plans were allowed a
specified number of days per year (annual sick leave
plans). Another 21 percent of the participants were pro-
vided sick leave for each occurrence of illness (per-dis-
ability plans), while most of the remainder were cov-
ered by both annual and per-disability benefits. The
number of days of sick leave granted varied widely by
the type of sick leave plan as well as by specific pro-
visions of each plan.

For employees covered by annual sick leave plans,
the number of days may be uniform throughout a
worklife or increase with seniority. The graduated bene-
fits showed sharp increases in the first 5 years of serv-
ice, more moderate increases through 15 years, and lev-
eled off thereafter.

Because annual sick leave plans do not renew bene-
fits after each illness, nearly two-fifths of the employ-
ees covered were allowed to accumulate unused sick
leave (cumulative plans). Such plans typically granted.
fewer days per year than plans in which unused days
were not accumulated. For example, at 20 years’ serv-
ice, cumulative annual plans averaged 19.1 days at full
pay, while noncumulative plans averaged 61.7 days.

Most per-disability sick leave plans increased bene-

fits with years of service, and generally provided more -

days of paid leave than annual plans. The average num-
ber of days at full pay was 48.7 at 1 year of service,
71.2 at 5 years of service, 101.3 at 15 years of service,
and 130.9 at 25 years of service.

About one-fourth of sick leave participants, usually

>For further analysis of short-term disability protection, see William
J, Wiatrowski, “Employee Income Protection Against Short-term
Disability,” Monthly Labor Review, February 1985, pp. 32-38.

under per-disability plans, had partial pay benefits avail-
able after full-pay benefits ended. Another 2 percent of
the participants had only partial-pay benefits available.

Sick leave plans commonly had a short service re-
quirement, generally 3 months, before new employees
became eligible for benefits. After attaining eligibility,
83 percent of the participants with 1 year of service
were in plans providing benefits on the first day of ill-
ness. The remainder typically had to wait 1 to 5: work-
days, with the waiting period often decreasing to zero
days after 10 or 15 years of service.

Sickness and accident insurance. Half of all employees
were protected against absences from work due to
short-term disabilities by sickness and accident insur-
ance plans. More than four-fifths of such employees had
their benefits fully paid by their employer. Those who
were required to contribute toward the cost of cover:
age most often paid a fixed amount, usually between $2
and $3 a month. Most of the others paid a percent of
monthly earnings, or had the cost included in the pre-
mium of an insurance package.

Payments under sickness and accident insurance plans
were either a percent of employee earnings or a sched-
uled dollar amount. The percent of earnings was usu-
ally fixed—almost always between 50 and 70 per-
cent—although percents varying by service and length
of disability wete'also observed. Plans paying a percent
of earnings covered 82 percent of the: white-collar par-
ticipants, compared with 36 percent of the blue-collar
participants. These plans often had a dollar limit on the
amount of the weekly benefit available; such limits have
risen steadily since they were first recorded in 1981.
Production workers were the most common recipients
of scheduled dollar benefits, which provided either a
fixed weekly amount (ranging from under $60 to over
$140), or varying weekly benefits (usually based on
earnings).

The maximum weeks of coverage for each disability
were fixed for all but 11 percent of participants, for
whom duration of coverage varied by length of serv-
ice. Of those participants with benefits lasting for a fixed
period, most had 26 weeks of coverage. Other common
periods were 13 and 52 weeks.

Sickness and accident insurance, unlike sick leave,
usually requires a waiting period before benefits begin.
The most common provision requires an employee to
be out of work due to illness or injury some short pe-
riod, usually 3 to 7 days, before payments begin. Wait-
ing periods may be shortened or eliminated entirely for
employees involved in an accident or hospitalized.

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

Eee



Table 16. Sickness and accident insurance: Percent of full-time participants by type and duration of i
Payments, medium and large firms, 1984—Continued i

Maximum weeks of coverage
Type of payment Less Greater | Varies
Total | than 13 44-25 26 27-51 52 than by i
13 $2 | service |
|
Technical and clerical !
All types .. 100 2 4 6 68 1 6 ” 7
Fixed percent of earnings 72 2 7 4 55 1 1 rv)
7 28 1 1 1 25 iv) 0) 10)
1 - - - 1 Vv) ~ -
18 - 3 3 10 - ) oO 1
14 1 2 19) " = 0)
10 - 2 10) 8 - rv) - cv)
Percent of earnings varies 9 - 0) 2 0) 3 - 2
By service ...... 5 - ~ 1 2 ~ 2 - -
By length of disability 2 - () - 19) 9) 1 - -
By both service and length of
disability ... 2 - - iv) - - - 1 i
By earings 1 - - 0) - - - vy i
Fixed weekly dollar benefit 10 - 3 () 6 - 0) - r0) :
Less than $60 2 - 2 - 1 - - - ~ |
$60-$79 1 - 1 - 19) - 1) - 0) i
$80-§99 1 - “) ~ i) - - - - :
$100-$119 2 - iV) oO 2 - - - - i
$120-8199 2 - 0) - 1 - 1) - ~ i
$140 or more 2 - oO - 2 - ) - 0
Weekly dollar benefit varies 9 - “ 0) 5 0) 1 - 3
By earnings - iv) () 4 QO 1 - 3
By service or length of |
disability . 1 - ) - 1 - vy) - -
Production
AM YPeS een 100 0 12 4 53 2 16 | ¢) 14
Fixed percent of earnings 38 (0) 3 2 26 tO) 4 ) 2
4 ) 1 1 8 ~ 0) - oO
55-59 0) - ~ - Y 0) ~ - -
60-64 af) - ) 1 8 - 10) 0) 1
65-69 10 t) 1 Yo 7 0) 0) - 1
70 or 3 0 1 0’) 2 - () - - |
Percent of earnings varies 1 - - ) 0 v) - - 0
By service .. ) - ~ iv) iv) ~ - - -
By length of disability rv) - - - - 0) - - -
By both service and length of
disability .. 4 - - Y iv) - - “)
By earnings ") - - - - - i)
Fixed weekly dollar benefit... 32 0) 8 1 18 1 2 ) 2
Less than $60 5 - 3 - 2 i) iV) - -
$60-$79 4 - 2 - 1 ro) ") - 0
$80-599 . 2 - 1 - 2 - - ~ -
$100-$119 5 ~ 1 1 4 - ") i)
$120-8139 . 4 Oy i) O 3 - 1 ~ ¢)
$140 oF more .... WwW - () - 6 1 2 - 2
Weekly dollar benefit varies 32 - 1 V) 8 1 13 - 9
By earnings ... a1 - 1 0) 8 1 12 - 8
By service or length of
disability ...... 1 - 0) - iv) - Y - re)
* Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may
not equal totals. Dash indicates no employees in this cate-
gov.
27


Appendix A: Technical Note

Scope of survey

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

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

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

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

Professional-administrative:

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

Technical-clerical:
Includes office and sales clerical, technical sup-
port, protective services, and other such occupa-

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

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

Production:

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

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

Benefit areas

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

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

Sampling frame

The scope of this survey was the same as that of the
Bureau’s 1984 National Survey of Professional, Admin-
istrative, Technical, and Clerical Pay (PATC). The list
of establishments from which the sample was selected
(called the sampling frame) was, therefore, the same as
that developed for the 1984 PATC. This sampling frame
was developed by refining data from the most recently



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

A random sample was selected within each stratum
using a probability technique to maximize the probabil-
ity of retaining establishments which were selected in
the 1983 survey.’ This method of selection reduced col-
lection costs by decreasing the number of new estab-
lishments in the sample.

Data collection

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

Data were collected during the months of January
through July, reflecting an average reference period of
March 1984. Respondents were asked for information
as of the time of the data collection visit.

Data tabulation

The tables presented in this bulletin show the percent
of employees that were covered by paid leave plans,
participated in insurance or pension plans, or were eli-
gible for other benefits. Except in table 66, counts of
workers covered by benefit plans included those who
had not met possible minimum length-of-service require-
ments at the time of the survey. Workers were counted
as participants in employee benefit plans that require
the employee to pay part of the cost only if they elected
the plan and paid their share. Plans for which the em-
ployee paid the full premium were outside the scope of
the survey, even if the employer paid administrative
costs. When tabulating the effect of retirement on life
insurance coverage, however, cases where the retiree
must pay the full cost of the insurance were counted

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

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

65

since the guarantee of insurability at retirement is con-
sidered a benefit.

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

A second approach is followed in tables 6, 9, 16, 18—
20, 32, 34-35, 38-39, 44-45, 47-48, 51, and 53-65, which
show the number of workers covered by specific fea-
tures in a benefit area as a percent of all employees who
participate in that general benefit area. These tables an-
swer questions concerning the typical coverage pro-
vided to persons with a given insurance benefit or a
private pension plan; for example, what percent of all
employees with health insurance receive dental
coverage? :

The third approach provides a close look at an im-
portant feature (tables 17, 21-31, 33, 36-37, 40-43, and
49); for example, what percent of all employees with
dental coverage in their health insurance are covered
for orthodontic work? Tables 50 and 52 combine the
second and third types above, indicating in the first row
of data the percent of persons in the benefit area who
have a particular coverage, while the remainder of the
table is based on all employees with that coverage.

This multilevel approach has the advantage of clearly
pointing out typical benefit plan characteristics after the
prevalence of the benefit has been established. Any of
the second or third types of tables, if desired, can be
converted to the first type by multiplying each data cell
by the appropriate factors. For example, to calculate
the percent of all employees with orthodontic cover-
age, multiply the percent of those with dental plans that
cover orthodontia (table 26) by the percent of health
insurance participants with dental coverage (table 20),
and multiply that product by the percent of all employ-
ees who have health insurance coverage (table 1).

Tables 8, 14-15, and 46 are distinct from the first
three approaches since they display average benefit val-
ues rather than percentages of workers. These tables
present the averages for all covered employees; calcu-
lations exclude workers without the benefit from the
base.

Survey response

Each of the 36 combinations of occupational groups
and work schedule or benefit areas (e.g., health insur-
ance for production employees) was treated as an indi-
vidual survey and separate estimates developed for each.
This treatment facilitated the use of partially completed
establishment reports in the survey. Therefore, the ac-
tual number of responses for the survey varies for each
of the 36 combinations.



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

Number of establishments:
In sample . . 1,499
Out of busine a
Refusing to respond .. 121
Nonresponse other than. 6
Responding fully or partially . 1,326

There were two procedures used to adjust for miss-
ing data from partial schedules and total refusals. First,
imputattons for thé number of plan participants were

Sas6S Where this number was not reported (2
percent of all participan Each of these values was
imputed by randomly selecting a similar plan from an-
other_establishment_in a similar industry and region.
The participation rate from this plan was then used to
approximate the number of participants for the plan
which was missing a participation value but was other-
wise usable.

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

Survey estimation methods

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

K

n
y=

where n = sample size
Y, = value for the characteristics of the i 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, was:

ay ff Yi

where ny = number of responding units
f; = weight adjustment factor for the i unit.

Cathe estimation procedure was then the process of

totals rieeded for each estimate and subsequently falculating -
the proportion, mean, or percentage which was Gesired.
u“

Reliability of estimates

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

Sampling errors occur because observations are made
from only a sample, not the entire population. Since
this survey was based on a probability sample, estimates
of sampling error for the survey estimates can be pro-
duced directly from the survey data. Sampling errors
for a limited number of the estimates published in this
bulletin are available in the detailed description of sur-
vey methodology and reliability noted below. In addi-
tion, the Bureau recently developed measures of sam-
pling errors for many estimates produced from the 1982
and 1983 employee benefits surveys, as well as for
changes in estimates between the two surveys. The re-
sults of the work are available upon request.

Nonsampling errors can be attributed to many
sources: Inability to obtain information about all cases
in the sample; definitional difficulties; differences in the
interpretation of questions, inability or unwillingness to
provide correct information on the part of respondents;
mistakes in recording or coding the data obtained; and
other errors of collection, response, processing, cover-
age, and estimation for missing data. Through the use
of computer edits of the data and professional review
of both individual and summarized data, efforts were
made to reduce the nonsampling errors in recording,
coding, and processing the data. The nonresponse ad-
justment procedures are also a potential source of sur-
vey nonsampling error. To the extent that the charac-
teristics of the nonrespondents are not the same as those
of the respondents, nonsampling error is introduced in
the estimates. The magnitude of these and other non-
sampling errors is currently undetermined.

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

66

ee i

estimating the appropriate employment or establishment +’,



4
E | Table 14. Paid sick leave: Average number of days at full
b Pay for full-time participants by type of plan, medium and

4 large firms, 1984
Profes-
sional | Techni-
and_| cal and | Produc-
Item a Pat |adminis-| clerical |tion par-
Pants trative | partici | ticipants
partici- | pants
pants.

Paid annual sick leave" by length of

service:

‘At 6 months .. 129] 193} 102) 78

HW] Att year 17.0) 26.1 147 10.3
i Ata years .. 218] 326] 205] 125 \
At5 years . 2a5| 420] 272} 166 |
At 10 years 376| 536] 983) 21.1 |
At 15 years 430} 601) 448) 243 '

At 20 years 459{ 640] 477) 26.1

At 25 years 479| 671} 494] 273

At 30 years? .. 4a4| 678) 499| 277

Paid per disability sick leave? by
q length of service:
fi ‘At 6 months | 441] 514] 361] 35.0

| Att year 487| 562] 390) 46.4
a At3 years .. 538} 64.1] 464] 442
fi At5 years .. 712) 789! 641! 668

i At 10 years a46| 935} 801} 732

At 15 years 101.3] 105.6; 948] 1034
At 20 years 1163| 1162] 1079] 1313
At 25 years 130.9] 126.1} 1205] 159.2
At 30 years* 131.1 | 1263} 120.7] 159.2

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

* The average (mean) was virtually the same after longer years of serv-
ice.
2 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.



Employee Benefits in Medium

and Large Firms, 1984

The 1984 survey collected data on employee work
schedules and developed information on the incidence
and detailed characteristics of 11 private sector em-
ployee benefits paid for at least in part by the employer:
Paid lunch and rest periods, holidays, vacations, and
personal and sick leave; sickness and accident, long-
term disability, health, and life insurance; and private
retirement pension plans. (See charts 1 and 2.) In addi-
tion, data were collected on the incidence of 18 other
employee benefits, including stock, savings and thrift,
and profit sharing plans; nonproduction bonuses; em-
ployee discounts; educational assistance; relocation al-
lowances; and free or subsidized parking. The major
survey findings are reported in this bulletin.

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

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

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

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

Summary

The great majority of full-time workers within the
scope of the 1984 survey of employee benefits were
provided with health and life insurance and private re-
tirement pension plans as well as paid holidays and va-
cations (table 1). Although the employer generally paid
the full cost of providing benefits, a greater percent of
employees shared in the cost of health insurance in 1984
than in 1983. Provisions of many employee benefits dif-
fered markedly between white-collar and production
workers.

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

Ninety-four percent of all employees had some pro-
tection against loss of income due to short-term disabil-
ity—either sick leave or sickness and accident insur-
ance, or both. Sick leave generally continued the
worker’s full salary beginning on the first day of an ill-
ness or accident, while insured benefits replaced less
than full pay and began after an initial waiting period.
Most employees also had some protection against ex-
tended income loss due to disability; 47 percent had
long-term disability insurance, and 46 percent were cov-
ered under private pension plans that provided imme-
diate disability retirement benefits.

Virtually all of the participants in health insurance
plans were covered for most categories of expenses re-
lated to hospital and medical care. Life insurance was
provided for nearly all employees, most commonly for
an amount equal to annual earnings, rounded to the
next $1,000.

Eighty-two percent of the employees in the survey
were covered by private retirement pension plans. Bene-
fits were most frequently based on earnings during ‘the
last 5 years of employment. Common eligibility require-
ments for normal retirement were: Age 65 with no
specified length-of-service requirement, age 62 with 10
years of service, and 30 years of service with no age
requirement. Virtually all covered employees could re-
tire early with a reduced pension, provided they ful-
filled minimum age and service requirements (most com-
monly, age 55 with 10 years of service).

Funeral leave, military leave, subsidized parking, and
full or partial defrayment of educational expenses were
available to at least three-fifths of the employees. Eli-



Contents—Continued

Page '
Tables—Continued

Life insurance:
35. Method of determining amount of basic life insurance and frequency

of related coverages ..... 20.6... c eee cece cece cere ceuceuscccetvuceeneces 4)
36. Multiple-of-earnings formulas by amount of basic insurance and

maximum coverage provisions ................. + 42
37, Flat dollar insurance by amount of basic insurance 43
38. Effect of retirement on coverage ... 43
Private pension plans:
39. Method of determining retirement payments ............ 43
40. Terminal earnings benefit formulas by amount of formula 44
41. Terminal earnings benefit formulas by definition of terminal earnings. . 45
42. Career earnings benefit formulas by amount of formula 46
43. Dollar amount benefit formulas by amount of formula . 46
44. Provision for integration with Social Security benefits . 47
45, Maximum benefit provisions ................0..005 48
46. Average replacement rates for specified final earnings and years of service . 49
47. Minimum age and associated service requirements for normal retirement . 50
48. Minimum age and associated service requirements for early retirement ... 51
49. Early retirement by reduction factor for immediate start of payments .. 52.
50. Provisions for disability retirement ......., 52
51. Provision for credit for service after age 65 53
52, Ad hoc postretirement annuity increases. 54
53. Vesting provisions................. 56
54. Provision for postretirement survivor annuity . 56
55. Provision for preretirement survivor annuity 57
Length of service requirement for participation:
56, Sickness and accident insurance . 58
57. Long-term disability insurance. 58
58. Healthinsurance ........... 58
59. Lifeinsurance........ 58
60. Private pension plans... 59

Type of plan sponsor:
61. Sickness and accident insurance.............. se. 59

62. Long-term disability insurance. 59
63. Health insurance . . 60
64, Life insurance..... 60
65. Private pension plans... . 60
66. Other benefits: Percent of employees eligible... eee eee ee eee 6t
Appendixes:
A. Technical note............. 0.0.00. cee 63

B. Availability of the survey’s data base .


Chart 6. Replacement rates under pension plans including and excluding Social Security
payments: Average benefits based on 30 years of service, medium and large firms, 1984

Average replacement
rate in percent

80
1 Private pension only
Combined private pension

and primary Social

60 Security payment

40

20-4

q
o~ -

T T qT - T
$15,000 $20,000 $25,000 $30,000 $35,000
Worker's final year’s earnings

Chart 7. Replacement rates under private pension plans: Average benefits based on 30 years
of service by type of pension formula, medium and large firms, 1984

Average replacement
rate In percent

10

\ T
$15,000 $20,000 $25,000 $30,000 $35,000 $40,000
Worker’s final year’s earnings



gibility for profit sharing, savings and thrift, and stock
ownership plans was not as common; nevertheless, avail-
ability of these capital accumulation plans has grown
substantially in recent years.

Work schedules

(table 2)

Straight-time work schedules of 40 hours per week
applied to 85 percent of the employees covered by the
survey. (Work schedules included lunch and rest pe-
tiods only if they were paid.) Nineteen percent of the
professional-administrative employees, 27 percent of the
technical-clerical employees, and 6 percent of the pro-
duction workers had shorter workweeks. Less than 2
percent of the work force was scheduled to work other
than a 5-day week.

Paid lunch and rest periods

(tables 3 and 4)

Nine percent of the employees received formal paid
lunch periods, and 73 percent were provided formal
rest time, such as coffee breaks and clean-up time. Both
benefits were more common among production em-
ployees than among the two other occupational groups.

Paid rest time, averaging 26 minutes a day for each
occupational group, was provided most commonly as
two daily breaks of 10 or 15 minutes each. Production
employees who were covered by paid lunch plans usu-
ally received 20 or 30 minutes a day, averaging 24 min-
utes. The 3 percent of white-collar workers eligible av-
eraged 37 minutes of paid lunch time each day.

Paid holidays

(tables 5, 6, and 8)

Virtually all full-time employees in each occupational
group were provided paid holidays, averaging 9.8
days—the same as in 1983. Extended holiday plans, such
as the Christmas-New Year’s Day period provided in
the auto industry, floating holidays, and “personal holi-
days,” such as employee birthdays, were included in
the holiday plans reported.

When a holiday fell on a scheduled day off, such as
a Saturday or Sunday, another day off was regularly
granted to 86 percent of the employees. Most of the
remaining workers received either another day off or
an additional day’s pay, depending upon the day on
which the holiday fell.

Paid vacations

(tables 7, 8, and 9) .

After 15 years of service, full-time employees com-
monly received 20 days of paid vacation annually.
Length-of-vacation provisions averaged 8.6 days after
1 year; 15.6 days after 10 years; and 22.3 days after 25
years of service, virtually unchanged since 1980—the
first year such estimates were developed. Plans cover-

ing professional-administrative employees generally
provided more vacation days than those for other em-
ployees. Sixty percent of the professional-administra-
tive employees, for example, became eligible for at least
15 days of vacation after 5 years of service; this com-
pared with 32 percent of the production employees.
Nearly all white-collar employees received their regu-
lar salaries or earnings during vacation periods. About
seven-eighths of the production employees received
such vacation pay; 13 percent were provided vacation
payments based on a percentage of annual earnings; and
1 percent received lump-sum payments from vacation
funds.

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

Seventeen percent of the plan participants were al-
lowed to cash in unused vacation time. This option was
offered to 9 percent of the white-collar participants and
25 percent of the production participants.

Anniversary-year bonus vacation days, such as an ex-
tra week of vacation at 10 and 20 years of service, were
included in the count of regular vacation time. Extended
vacation plans, however, were excluded.”

Personal leave

(table 10)

Formal personal leave, which allows employees to
be absent from work with pay for a variety of reasons
not covered by other specific leave plans, was provided
to slightly less than one-fourth of the employees. Nearly
one-third of the white-collar employees received per-
sonal leave, twice the proportion of production em-
ployees with this benefit. Most commonly, employees
provided personal leave were eligible for 1 to 5 days,
averaging 3.6 days per year. In cases where personal
leave was part of an “annual leave” plan (combined
vacation and personal leave) and could not be shown
separately, it was reported as vacation time. The sur-
vey did not cover the extent of informal personal leave.

Short-term disability benefits

(tables 11-17)

Workers may be protected against loss of income due
to a short-term disability through paid sick leave, usu-
ally providing 100 percent of their normal earnings, or
sickness and accident insurance, commonly replacing

2 Under collective bargaining agreements negotiated in 1983 in the
aluminum and can industries, employees continue to receive extended
vacations. The aluminum contract provides for 10 weeks off with 13
weeks’ pay. in addition to regular vacation, every seventh year. The
can agreement calls for 13 weeks’ paid vacation, including regular
vacation, every 5 years beginning with the fifteenth year of service.
Contract negotiations in 1983 between the Steelworkers and the ma-
jor stee] companies.eliminated provisions for extended vacation plans.



Table 4. Paid rest time: Percent of fulltime employees by Table 5. Paid holidays: Percent of fulltime employees by

minutes of paid rest time per day, medium and large firms, number of paid holidays provided. medium: and:
1984 large firms, 1984 Provider:.each:. year inesivin
|
Profes- v
Profes-
sional |Techni- :
Atom-| 274 [eat and Produc: 7 sonal papi Produc
Minutes per day Tovens| 28min. | clerical | smpioy. Number of days " em- | amin: | clencat |. tr
ployees| trative |employ-|~" das ployees| trative lemploy.{employ-
lemploy-| ees employ.| ees” | 28
ees ees
Total joo | 100 | 100 | 100 Total 100 | 100 | 100 | 100
Provided paid rest time ... 73} 59 | 73} 80 Provided paid holidays ea} 99 | 100 | 96
Under 15 minutes .. ny) 1 3 Under 6 days 3 1 1 4
18 minutes : 3 5 2 6 days ... 4) 3 6 4
Over 15 and under 20 minutes 2 1 2 3 6 days plus 1 or 2 half days oe] oOo}, oo
20 minutes ... aa | 15 | 18) 390 7 days 6 5 6 7
‘Over 20 and us 4 1 1 6 7 days plus 1 oe} oo} oo} o
30 minutes .. | 36 7 44 31 8 days ...... 7 7 7 6
Over 20 and under 40 minutes... () | OC) | QO | O @ days plus 1 or more halt . ;
40 minutes .. _ 1 10) 0) days .. 1 1 2 v) i
Over 40 minutes 2| -j) 0 4 9 days « | 13 | 16| 10 i
Number of minutes not 9 days plus 1 or 2 halt days .. 1 2 2/0 7
available o}lopyo,o 10 days ... 26 | 26} 25 | 27 p
10 days plus 1 of more half Fil
Not provided paid rest time .. ar | 41 | 27 | 20 days ... 1 1 1 1 i
11 days wl} wi a7} 16
41 day jus 1 or 2 half days 1 1 1 ")
* Less than 0.5 percent. todeys ay " : 3 Q,
a hi (") " " -
NOTE: Because of rounding, sums of individual items may not equal Bones 2 halt days O 7 OL Os 3
totals. Dash indicates no employees in this category. 13 Sete plus 4 half day ololoelo
14 days . + 1 1
More than 14 days .. o;,o]oj,oa
Number of days not avail eo} oo] o |
Not provided paid holidays ..... 1 any) 2

* Less than 0.5 percent.

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

Table 6. Paid holidays: Percent of full-time participants by
policy on holidays that fall on a regularly scheduled day off,
medium and large firms, 1984

Protes-
sional | Techni-
‘and | cal and | Produc
adminis-| clerical | tion par-
trative | partici- | ticipants
partici: | pants
pants

All par-

Holiday policy ticipants

Total

100 100 100 100
0) ) a) 1

Another day off granted vnccncnnn| 86 ot 89 81

Holiday is not observed .....

Additional day's pay in lieu of

Holiday ener 3 1 2 4
Another day off or day's pay.

depending on when holiday falls.) 9 | 4 5 13
Another day off or holiday not

‘observed, depending on when

holiday falls pesctnneneies 1 2 3 a
Other provision applies? clue} CD iv) 0) 1
Holiday policy not determinable ...... 1 1 1 1

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

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

19



Employee Benefits in Medium:

and Large Firms, 1984

&>

J.3 Department of Labor
Bureau of Labor Statistics
vune 1985

HBulieun 2237


Table 36. Life insurance: Percent of fulltime participants In plans with multipie-of-earnings formulas by
amount of basic Insurance and maximum coverage provisions, medium and large firms, 1984

In plans In plans with maximum coverage
Formula Total without
maximum AN Less than | $50,000- | $100,000- | $250,000 or
coverage $50,000 } $99,999 | $249,999 more |
All participants
Total .. 100 50 50 3 8 20 20
Life insurance is equal to annual
earings times:'
Less than 1.0 3 1 2 a 0. 1 -
4a 24 7 2 3 9 3
1 1 ® iv] - - -
10 3 ia) 1 4 2
0. - 19) ® - - =
7 18 20 ca) 2 5 12
3 1 2 - 1 iv] 1
0, - ) - 0 - -
2 1 2 - iv) e 1
1 1 19) - - 0. Q
Multiple varying with earnings 4 1 1 - rv) 1 (0)
Professional and administrative
Total 100 50 50 3 8 18 22
Life insurance is equal to annual
i earnings times:"

i Less than 1.0 2 1 1 0, 9) is) +
i 38 24 7 2 3 8 4
L 1 1 - - - - -
| 10 3 6 ® 1 a
H 0 - ) co] - - :

fal re] 19 22 i) 2 6 4
| 3 2 1 - i) 9) 1
6 - i) - ° - -
Hl 2 1 2 - 6 ® 1
i 1 4 ® - - 0. ®
i 2 1 1 - i) a] 6
| Technical and clerical
Total .. 100 50 50 2 8 1 |. 2t
! Life insurance is equal to annual
‘earnings times."
Less than 1.0 2 1 iV) i) (9) i) -
Hy | 42 25 7 1 a 9 4
i 1 1 ®, 0 - - -
9 2 7 ® 1 4 2
! co) - ) i) - - -
j 37 16 21 re) 3 5 14

7 3 2 1 - 1 6 1
/ - ty) - 0 - -
1 3 1 2 - “ € 4
1 1 1 ) - = ~ 0

Multiple varying with earnings .. 1 0 1 - ° 1 0

1 Production
i Total ... 100 51 49 3 8 23 15
i

HH 5 1 4 1 a 4 -
a 44 27 18 2 3 10 2

1 1 - - - - -
1" 2 8 2 3 2
33 19 4 7) 1 4 8
3 1 2 - 1 - 1
1 - 1 - 1 - -
1 ® 1 - - ta) 1
) ° (a) - - - is)
Multiple varying with earnings - - - 1 -
* When the multiple-of-earnings formula varied with age, the 2 Less than 0.5 percent.
maximum multiple was tabulated. A few plans varied the multi-
ple-of-earnings formula according to service; in these cases, a NOTE: Because of rounding, sums of individual items may
participant was assumed to have 15 years of service. not equal totals. Dash indicates no employees in this category.



half of all personal health care expenditures in the United
States are for hospital care.‘ Virtually all of the partici-
pants in health plans analyzed in this study received
coverage for hospital expenses. Although most employ-
ees’ insurance covers all initial hospital room expenses,
a growing minority must pay part of the first-dollar
costs. The percent of health plan participants that have
only major medical coverage and, therefore, are re-
quired to pay both an initial deductible and a percent-
age of subsequent hospital room charges increased to
28 percent in 1984, from 19 percent in 1983 and 12 per-
cent in 1982. Of the 71 percent with basic hospital cov-
erage, 5 percent must pay a specified amount per con-
finement or, in some cases, pay for the first day of
confinement.

Of those that received basic hospital coverage, 94
percent were in plans that paid room and board ex-
penses up to the semiprivate rates, providing some pro-
tection against rising hospital charges. Nearly nine-
tenths of the participants in basic hospital plans had
limited duration of coverage. Seven-tenths had plans
which specified the maximum number of days covered
per confinement, most commonly 120 or 365 days. Most
of the remaining plans limited the duration of coverage
by specifying 2 maximum dollar amount per: confine-
ment or per year.’ Additional coverage was usually
available under a major medical plan for cases that ex-
ceeded these limitations.

Surgical coverage. Seventy-one percent of health plan
participants had basic coverage for surgery in 1984.
Seven-tenths of these participants had plans with pay-
ments based on the “usual, customary, and reasonable”
charge for the procedure performed, up from
three-fifths in 1979. Although most of these plans paid
100 percent of such charges, slightly over one-fifth of
the participants were in plans that paid between 80 and
95 percent or imposed an overall dollar limit on surgi-
cal payments, The remaining participants with basic
surgical benefits were. covered by a schedule of pay-
ments, listing the maximum amount covered for each
operation. Charges in excess of the scheduled amount
were usually covered by a major medical plan.

Major medical coverage. Major medical benefits, pro-
vided to nine-tenths of the health insurance participants,
generally covered a wide range of medical services both

‘Health Spending Trends in the 1980s: Adjusting to Financial In-
centives,” Health Care Financing Review, Spring 1985 (U.S. Depart-
ment of Health and Human Services, Health Care Financing Admin-
istration), pp. 1-26.

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

in and out of the hospital. There are two types of ma-
jor medical plans: One type supplements basic benefits
by covering expenses which exceed basic benefit limi-
tations or by covering expenses not paid by the basic
plan; the other type is comprehensive and stands alone
without basic plan coverage. Comprehensive major
medical policies have been embraced by employers
seeking to contain costs of providing health care by
eliminating first-dollar coverage."

With very few exceptions, major medical benefits
were not paid until the participants paid a certain amount
of the expenses. The purpose of this deductible portion
is to keep the premium cost down and discourage un-
necessary use of medical services. A deductible amount
of $100 has been the most common since the survey’s
inception in 1979, applying to nearly half of all plan
participants. However, 21 percent were required to pay
deductibles of $150 or more in 1984, up from 12 per-
cent in 1983 and 8 percent in 1982 (chart 3). The fre-
quency of higher amounts was lower for production
workers.

Once the worker meets the deductible requirement,
the plan pays a specified percentage (coinsurance) of
incurred expenses. Almost seven-eighths of the partici-
pants were in plans that paid 80 percent of expenses,
with the remaining 20 percent to be paid by the worker.
For three-fourths of the participants, however, the per-
centage paid by. the plan increased to 100 percent after
a specified level of expenses was incurred during a year.
For example, a plan might pay 80 percent of the first
$5,000 of covered expenses and 100 percent thereafter,
thus limiting the employee’s “out-of-pocket” cost to
$1,000 (in addition to the deductible). Plan limits such
as days of coverage, number of visits a year, or pay-
ment schedules, however, are still in effect after the
specified level of expenses has been reached.

By requiring employees to help pay the initial cov-
ered expenses during an illness or accident, insurers of
major medical policies are able to absorb the full ex-
penses of an infrequent catastrophic illness without sub-
stantial increases in premium costs to the employer or
worker. Growth of this catastrophic coverage has in-
creased rapidly since 1979, when less than one-half of
the major medical participants were covered.’

Benefits for 82 percent of major medical participants
were subject to a ceiling on the amount payable by the
plan, usually a lifetime maximum. The most common

* Comprehensive major medical plans can be broken down into strict
and modified varieties. All expenses covered are subject to the de-
ductible and coinsurance provisions under the strict version whereas
the modified version might cover hospital, or hospital and surgical,
expenses in full up to a specified dollar amount without the applica-
tion of a deductible. (Also, see footnote 7.)

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



with a limit on the weekly benefit ($135 in New York
and $158 in New Jersey during the 1984 survey period).*

Long-term disability insurance

(tables 18 and 19)

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

Forty-seven percent of the employees covered by the
study had LTD insurance; one-fourth of the partici-
pants were required to contribute toward the cost of
the plans. The amount of LTD insurance usually var-
ied by earnings, as did the cost to the employee. When
a flat rate was charged, employees usually paid under
0.5 percent of their earnings. In plans charging a
monthly amount per $100 of covered earnings, the rate
was normally less than 60 cents.

The degree of participation varied widely among the
employee groups, with white-collar workers twice as
likely to have LTD insurance as production workers.
However, many employees not covered under LTD
insurance are eligible for an immediate disability pen-
sion through their retirement plan; 46 percent of the
employees (nearly three-fifths of the production
workers) were covered by immediate disability retire-
ment provisions.

Long-term disability benefits were usually 50 or 60
percent of monthly pay. Most of the plans that pay a
percent of predisability earnings had maximum payment
limitations—commonly $1,500 to $5,000 a month.

Slightly over one-fifth of the participants were in
plans that provided a benefit which was not a fixed
percent of earnings, but was a variable percentage of
earnings, a flat dollar amount, or a scheduled dollar
amount dependent on earnings, length of service, or
length of disability. Production employees were twice
as likely to be covered under these formulas as
white-collar employees.

A ceiling on income during disability was a common
limitation to LTD payments, regardless of the type of
plan. These ceilings affected benefits only if the amount
payable from the LTD plan plus income from other
sources, such as rehabilitative employment and family
Social Security payments, exceeded a specified percent-
age of predisability earnings (frequently 70 to 75 per-

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

cent). Seven-tenths of the LTD participants were lim-
ited by these income ceilings, by the dollar maximums
in plans that pay a percent of earnings, or by a combi-
nation of both.

Health insurance

(tables 20-34)

Almost all of the workers covered by the survey
were provided health insurance. Sixty-three percent of
the workers were in plans which extended coverage to
retirees, although retiree contribution requirements and
the level of coverage maintained (including Medicare)
sometimes varied from those of active workers.

Virtually all of the participants in health insurance
plans were covered for the major categories of medi-
cal care, such as hospital room and board, care by phy-
sicians and surgeons, diagnostic X-ray and laboratory
work, prescription drugs, and private duty nursing.
Among benefits less commonly provided were vision

care (30 percent), hearing care (14 percent), and rou-,

tine physical exams (8:percent). Unlike most other em-
ployee benefits, there were few differences in health
insurance provisions among employee groups.

In line with efforts to contain costs of health care,
an increasing number of plans provided less expensive
alternatives to a hospital stay. Coverage for treatment
in extended care facilities increased from 58 percent of
plan participants in 1983 to 62 percent in 1984; cover-
age for home health care rose from 37 percent to 46
percent; and hospice care, an alternative to hospitaliza-
tion for terminally ill patients, was available to 11 per-
cent in 1984, the first year this item was tabulated.

The various categories of medical care are covered
under 1 of 3 benefit arrangements: Basic benefits only,
which generally have no deductible or coinsurance pro-
visions; major medical benefits only, which usually
have both deductible and coinsurance provisions; or
basic benefits plus major medical. In-hospital care was
most commonly covered by an arrangement that of-
fered basic coverage plus supplemental coverage under
major medical benefits. Certain categories of medical
care, such as private duty nursing, visits to a physician’s
office, and prescription drugs, usually were covered
only under major medical benefits. Dental and vision
care were almost exclusively covered as basic benefits.
Regardless of the benefit arrangement used, most health
plans limited the size of benefit payments.

Hospital coverage. The most costly component of

_ health care is that provided by a hospital. Nearly one-

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

i



Table 52. Private pension plans:' Percent of full-time participants in plans granting ad hoc postretirement
annuity increases,’ medium and large firms, 1984—Continued

Professional and 5 Sc
5 A Sse Technical and | Production partici-
Characteristics All participants bedieiietiag clerical participants pants
Benefit formula for most recent
increase
Total 100 100 100 100
Flat increase .. 29 29 29 29
Monthly dollar amount 5 2 2 8
Less than $10.00 .. 2 (e) iv) 3
$10.00... + ~ - 2
$10.01-$20.00 1 (a) i) 1
More than $20.00 .. 1 1 1 1
Varies by date of retirement () 0) (y) 1
Percent of present benefit 24 28 28 2
Less than 5.0 3 3 6 2
5.0 1 ey ie) 1
51-74 2 3 2 2
759.9 1 ro) 1 1
10.0 1 1 1 i)
10.1- 1 2 2 1
15.0 1 1 1 O
More than 15.0 .. 1 1 0 1
Varies by date of retirement .. 14 16 14 12
Type of flat increase not determinable r7) - - 0
Increase per year of retirement .. 43 50 55 34
Monthly dollar amount ... 1 2 1 1
Percent of present benefit 42 47 53 34
Less than 2.0 a 5 3 3
6 5 7 6
1 1 1 iv)
7 a 8 4
iv) 1 1 -
2 2 3 2
3 3 3 2
1 1" 14 10
3 3 2 4
60 2 3 3 ®
More than 6.0 ) - - 0
Varies by date of retirement .. 5 4 9 3
Type of increase per year of retirement not
determinable : 1 1 1 iv)
Increase per year of service 24 16 "1 34
Monthly dollar amount 23 15 W 34
Less than $.50 7 3 2 "
1 1 iy) 2
iy) iv) - iW)
8 5 2 12
iv) 1 1
1 7) is) 1
More than $2.00 ... 2 a 3 1
Varies by date of retirement .. 5 3 2 7
Percent of present benefit ... e) 1 i) 0)
Combination of two or more benefit formulas ....... 2 3 a 2
Type of formula not determinable 1 2 2 1

* Excludes supplemental pension plans.

? Unscheduled increases in pension payments for employees

retiring prior to 1984,
2 Less than 0.5 percent.

55

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

i
|
i
|



Table 31. Health insurance: Percent of full-time participants in plans with mental health benefits by extent of benefits,
medium and large firms, 1984

Professional and adminis- | Technical and clerical Production
All participants trative participants participants participants
Coverage limitation
Hospital | Outpatient | Hospital | Outpatient | Hospital | Outpatient | Hospital | Outpatient
care care care care care care care care
Total 100 100 100 100 100 400 100 100
With coverage 100 97 99 97 99 97 100 96
Covered the same as other
illnesses .. . 48 7 48 6 a7 6 48 7
Subject to separate limitations 52 90 51 a1 52 31 52 89
Limit on days or visits 29 23 27 24 31 25 30 21 |
Limit on dollars... 24 70 23 n 23 n 24 69 i
Major medical coinsurance :
limited to 50 percent 3 54 2 53 3 84 4 54
Other limitations 9 14 " 12 " 12 8 16
Not covered ... () 3 1 3 1 3 0 4

* The total is less than the sum of the individual items because many
plans had more than one type of limitation on mental health coverage.
? Less. than 0.5 percent.

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

firms, 1984
Profes-
sional | Techni-
Al par- | 28d__| cal and | Produc-
Benefit item ficigants |2dminis-| clerical |tion par-
PF trative | partici- | ticipants.
partici- | pants
pants
Total 100 100 100 100
. Covered by at feast one of the
fisted special benefits’ 75 78 78 72
‘Second surgical opinion 98 43 39 36
Alcoholism treatment .. 61. | 61 63 59
Drug abuse treatment 52 52 53 5t
Hearing care? 14 13 aT) 16
Hospice care " 13 "1 10
Physical examinations 8 10 10 6
Not covered by any of listed special
benefits .. . | 25 22 22 28

The total is fess than the sum of the individual items because many
participants receive more than one benefit.
? Plan provided, as a minimum, coverage for hearing examination ex-

penses.



Table 16. Sickness and accident insurance: Percent of full-time participants by type and duration of
Payments, medium and large firms, 1984

Maximum weeks of coverage

‘Type of payment Less Greater | Varies
Total | than | 13 | 1425] 26 | 27-51] 52 | than
13 52 | service
All participants
All types .. 100 1 1 4 59 2 13 iv) ”
Fixed percent of earnings 47 1 4 3 36 0 1 ") 2
16 9] 1 1 13 ) ty - Q
1] = - - 7) OF OF = - -
14 - 1 1 10 - QO 0) 1
"1 cy 1 QO 9 0 i) iv) 1
5 0 1 ) 3 - iu) 7 Oo
Percent of earnings varies 4 - 10) 9) 1 t) 2 - 1
By service 2 - - ) “) - 1 - -
By length of disability .. 1 - Yo - 1) 0) 1 - -
By both service and length of
disability 1 - ° 0) - - - 1
By earings .. 0) - - - 10) - - - ro)
Fixed weekly dottar benefit 25 iV) 6 1 14 1 2 0 2
Less than $60 4 - 3 - 1 r0) ) - ~
$60-$79 a - 2 - 1 10) 0) - 0)
$80-$99 2 - 1 - 1 - - - -
$100-$119 4 - 1 1 3 - QO 0 0
$120-8139 4 v) i) iv) 3 ~ iv) - iv)
$140 or more 8 - 0 - 5 0) 1 - 2
Weekly dollar benefit varies 24 - 1 0) 7 1 9 - 6
By earnings .. 23 - 1 0 7 1 9 - 6
By service or length of
disability 1 - ) - QO - iv) - 0)
Professional and administrative
All types ... 100 1 7 4 4 1 10 iv) 2
Fixed percent of earings 73 1 5 60 1 1 0 1
50-54 24 0) 2 0 22 - - - )
55-59 1 - - - 1 1 - - -
60-64 25 - 1 24 - ) 0 -
65.69 16 1’ i () 12 - - 0) 1
70 or 7 - 1 1 5 - 0 - -
Percent of earnings varies n - (a) 2 - 7 - 1
By service 5 - 0”) ” - 4 a -
By length of 4 - - - 1 - 3 - -
By both service and leng!
disability 2 - - - 1 - - 1
By earning: 1 - - - “) : : ¢)
Fixed weekly dollar benefit 8 a) 1 1 6 - 9) - 0)
Less than $60 . 2 ~ 1 - 1 - - - -
$60-$79 0) - ) - 9) - ~ - -
$80-$99 () - io) - ) - = - -
$100-$119 2 - - 1 2 - ’) - -
$120-8139 2 ) - - 1 - ¢) - -
$140 or more 2 - - 2 - i) - “)
Weekly doltar benefit varies .. 8 - () - 6 oO 1 ~ ()
By earnings ... 7 - () - 6 ) 4 - iv)
By service or length of
disability . . t) - - - 0) - ~ - -

See footnotes at end of table.



|

Table 37. Life insurance: Percent of full-time participants in Table 39, Private pension plans:' Percent of full-time

plans with flat dollar insurance by amount of basic Participants by method of determining retirement payments,
insurance, medium and large firms, 1984 medium and large firms, 1984
Protes- Protes-
sional | Techni- sional | Techni-
All par. |_and__| cal and | Produc- ; ‘Allpar | and _| cal and | Produc-
Amount of insurance feipents |20minis-| clerical | tion par- Basis of payment? ticipants |24minis-) clerical ition par-
pants | ‘trative | partici- |ticipants ipants | trative | partici- | ticipants
partici- | pants Partici- | pants
pants pants
Total .. 100 | 100 | 100 | 100 Total .. 1o0 | 100 | 100 | 100
Less than $2,000 4 4 3 4 Terminal earnings formula 54 70 71 36
$2,000-$4,999 " 6 10 12 No alternative formula .. 24 31 33 12
$5,000-$9,999 36 33 46 35 Terminal earnings alternative 8 12 10 5
$10,000-$14,999 . 30 29 30 30 Career earnings alternative 3 4 4 2
$15,000-$19,999 . 9 4 4 10 Doltar amount altemative? 19 23 7 7
$20,000-$24,999 7 20 5 5 Percent of contributions.
$25,000-$29,999 . 3 2 2 4 alternative iv) 1 ty) 0 !
$30,000 and over 1 2 1) 1
Career earnings formula 14 22 15 10
7 No alternative formula .. 8 12 9 5
Less than 0.5 percent Career earnings alternative 1 1 1 1 i
NOTE: Because of rounding, sums of individual items may not equal to= Dollar amount alternative 8 8 8 4 |
tals. Dollar amount formula? 28 4 10 50
No alternative formu 7 4 10 48
Dollar amount alternative” 1 - ry) 2
Percent of contributions
alternative ) iv) oO re)
Table 38. Life insurance: Percent of full-time participants in
basic life insurance plans by effect of retirement on Percent ie Contributions formula 2 é 9 3
ul
coverage, medium and large firms, 1984 Percent of contributions
Profes- alternative i) 0 “ iy)
sional | Techni-
avpan| and. | al and | Produc. Money purchase ... 2 4 3 1
Effect of retirement ticipants /20minis-| clerical |tion par-
iclps trative | partici- | ticipants ' Excludes supplemental pension plans.
partici- | pants * Alternative formulas are generally designed to provide a minimum
pants benefit for employees with short service or low earnings.
* Includes formulas based on dollar amounts for each year of service
Total .. 100 | 100 | 100 and schedules of benefits that vary by length of service.
* Less than 0.5 percent.
Insurance continui 64 66 67 61
Continues tor life 62 64 65 59 NOTE: Because of rounding, sums of individual items may not equal to-
Continues in full 2 2 2 2 tals. Dash indicates no employees in this category.
Reduced once .. 36 36 37 36
Reduced more than once
during retirement . 23 26 25 at
Continues in form of paidup
insurance? . ° a) 7) to)
Ceases during retirement 2 2 2 2
Insurance discontinued immediately.| 36 34 33 39

| Includes plans in which coverage is fully retiree paid.

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

> Less than 0.5 percent.

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

43


Table 15. Paid annual sick leave:' Average number of days at full pay for full-time participants by accumulation policy
and sickness and accident insurance coordination, medium and large firms, 1984

Profes- Profes-
sional | Techni- sional | Techni-
' All pare | _ 29d | cal and | Produc Alt par. |_ 294 _| cal and | Produc-
item eipants [adminis clerical |tion par. item Ail par: | adminis-| clerical |tion par-
trative | partici- | ticipants| ‘crpants | ‘trative | partici- | ticipants
Partici- | pants partici- | “pants
pants pants
At 1 year of service:
Cumulative plan ... | 103] 135 {| 105| 7.9 |/At 10 years of service:—Continued
With sickness and accident Noncumulative plan 49.7|. 673} 499) 282
insurance .. 75| 101) 84] 58 With sickness and accident
Without sickness and insurance ... 252) 416] 291| 122
accident insurance 125] 154) 11.9] 104 Without sickness and
Noncumulative plan ‘) aro} 317] 173] 122 accident insurance .. 661} 78.1] 615) 503
With sickness and accident
ingurance . 11.0} 17.9) 11.8] — 6.1 [\At 20 years of service:
Without sickness and ‘Cumulative plan ... ja1| 258} 210| 129
accident insurance 278| 375! 204] 21.3 With sickness and accident
insurance ie4| 227| 229] 95
At 5 years of servic Without sickness and
‘Cumulative plan | 138) 194) 146] 96 accident insurance ar2| 27a] 197) 174
With sickness and accident Noncumulative plan 617) - B11) 635! 363
a1] 157] 138| 73 With sickness and accident
insurance . . 334] 527] 396] 17.0
accident insurance ie0| 209) 181} 125 Without sickness and
Noncumulative plan .. 372) 522] 346] 220 accident insurance 805} 930} 767} 626
With sickness and accident
IngUrANCe ree 18.2| 90.1} 19.9] 9.6 //At 25 years of service:
Without sickness and Cumulative plan | 194] 262| 212] 130
accident insurance .. 49g] 614| 428] 994 With sickness and accident
insurance | 19] 23a] 235) 98
At 10 years of service: Without sickness and
Cumulative plan .. 172| 230) 186) 11.9 accident insurance aia) 278) 198) 174
With sickness and accident Noncumulative plan ‘| 647) 953] 660} 983
insurance 14.7 20.2 19.7 O41 With sickness and accident
Without sickness an insurance seo} sez! 427] 186
accident insurance .. wai} 245| 179] 154 Without sickness and
accident insurance 037] 975] 7e8| 65.2

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

riod. Data on per disability plans are presented in table 14.

NOTE: Computation of average excluded days paid at partial pay and

workers with only partial pay days or zero days of sick leave.

Of days of paid leave under a per disability plan is renewed for each ill-
ness or disability after the employee returns to work for a specified pe-



Table 66. Other benefits: Percent of full-time employees In establishments providing specified benefits by percent of
employees eligible, medium and large firms, 1984—-Continued

51 to 99 1 to 50
Benefit Total Alwar percent percent — | None eligible bora
at eligible eligible
Technical and clerical employees
Miscellaneous benefits—Continued
Subsidizea meats:
i Full defrayment of cost 100 1 0) ) 93 6
! Partial defrayment of cost . 100 22 3 3 66 6
\ Educational assistance:
| Full defrayment of expenses 100 28 0) ) 66 5
| Partial defrayment of expenses 100 49 1 1 44 6
Parking:
Provided at no cost 400 6 5 6 2a 5
Provided below commercial rates 100 | 4 0) 3 88 5
‘Company automobile for personal business:
Without reimbursing the compan 100 iV) oO 1 93 5
Partially reimbursing the company 100 0) - 1 93 5 '
Production employees |
Paid leave: |
Funeral leave 100 86 4 Y 9 4 |
Military leave 100 66 v) 1 28 5
Profit sharing, savings, and stock plans:
Profit sharing 400 19 2 2 72 5
Savings and 1 400 19 4 4 68 5
Stock bonus plans 100 3 iv) 1 92 5
Stock purchase plans 100 "1 1 1 83 5
Stock ownership plans* 100 23 2 2 68 5
Income continuation plans:
‘Severance pay 100 30 2 6 87 5 /
Miscellaneous benefits:
Employee discounts ... 100 51 1 iv) 43 5
100 9 v) 1 a4 5
100 53 1 1 40 5
100 7 1 1 7 6
Relocation allowance: : i
Full defrayment of expenses 100 9 - 6 79 5
Partial defrayment of expenses 100 10 1 2 83 6
Recreational facilities:
Full defrayment of cost .. 400 14 iv) iv) 81 5
Partial defrayment of cost 100 15 - vy 80 5
Subsidized meals:
Full defrayment of cost 400 1 - iV) 94 5 |
Partial defrayment of cost 400 16 ) 1 78 5 i
Educational assistance: . |
Full defrayment of expenses .. 100 17 10) + 7 5
Partial detrayment of expenses . 100 51 tu) 2 42 5
Parking:
Provided at no cost 100 80 2 1 12 5
Provided below commercial rates 100 1 ) 1 98 5
Company automobite for personal busine:
Without reimbursing the company 400 () - 1 94 5
Partially reimbursing the company 100 oO. - 0 95 5
* Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may not equal
2 Include Employee Stock Ownership Plans and Payroli-based Stock totals. Dash indicates no employees in this category.

Ownership Plans.



F | Chart 1. Paid time off: Percent of full-time employees covered, medium and
i large firms, 1984

Vacations

Hotidays

Rest time

Sick leave

Personal leave

Lunch perlod

0 25 50 75 100
Percent

Chart 2. Insurance and Pension plans: Percent of full-time employees covered,
medium and large firms, 1984

Health insurance, is s
employees s

Health insurance, i
tamily 4

Life Insurance

Retirement pension

Sickness and
accident insurance

2 Partly employer financed

Long-term disability Wholly employer financea

insurance

T T T
0 25 50 75 100
Percent



Preretirement survivor benefits, Nearly all participants
were in plans providing for survivor payments in case
the employee died before retirement. Employees usu-
ally had to be eligible for early retirement before any
death benefits were payable.” For seven-tenths of the
participants, a surviving spouse would receive an an-
nuity equivalent to the amount payable if the employee
had retired on the day prior to death and had elected
a joint-and-survivor form of payment. Most survivor
pensions of this nature were based on an early retire-
ment benefit and were provided at no cost to the em-
ployee. For 16 percent of participants, however,
preretirement joint-and-survivor protection involved an
extra employee cost and was available only if elected
(down from 24 percent when first tabulated in 1980).
The cost was usually paid by the employee through a
small deduction in the pension ultimately payable to ei-
ther employee or spouse.

Employee contributions. The employer paid the full
cost of the pension plan for 91 percent of the partici-
pants. Of the 9 percent that had to pay part of the cost,
virtually all paid a percent of earnings. The majority
of participants in contributory plans paid one rate (usu-
ally 2 to 5 percent) on earnings above a specified level,
and a lower rate (frequently zero) below that earnings
level. The annual earnings level at which this break oc-
curred ranged from $3,000 to $37,800, the Social Secu-
tity taxable wage base in effect during 1984. Plans with
varying employee contributions usually coordinate pri-
vate benefits with Social Security payments; as discussed
earlier, rates used in these plans are higher on earnings
above the Social Security taxable wage base. Less than
2 percent of the participants paid a flat rate—none paid
more than 4 percent.

Plan participation requirements

(tables 56-60)

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

Insurance plans. The incidence of service requirements
did not vary significantly by benefit area, but was low-

See footnote 20 for changes required by the Retirement Equity
Act.

est among health and life insurance plan members and
highest for sickness and accident insurance. Except for
long-term disability insurance plans, service require-
ments were usually only 1, 2, or 3 months. Require-
ments found in LTD plans were more restrictive; nearly
two-fifths of the participants had requirements of from
6 months to 3 years or more. Because of the long-term
nature of this benefit, more employers restricted eligi-
bility to employees who have demonstrated some at-
tachment to the company.

For health and life insurance benefits, the incidence
of service requirements varied markedly among the em-
ployee groups. While nearly three-fifths of profes-
sional-administrative employees could participate im-
mediately, almost two-thirds of production workers had
some waiting period.

Private pension plans, Nearly two-fifths of employees
with pensions had immediate coverage under their plan.
Another one-fifth could participate regardless of age
but had a service requirement, seldom more than 1 year.
Most of the remaining employees could not enter their
employer’s pension plan until they reached age 25 and
completed I year of service, the most restrictive re-
quirement permitted by ERISA in 1984.”

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

Both minimum and maximum age provisions occurred
Jess frequently in plans covering production workers.

Plan sponsors and collective bargaining

(tables 61-65)

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

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

* See footnote 20 regarding the Retirement Equity Act's change in
the minimum age requirement for participation in pension plans, ef-
fective January 1, 1985.



Tabte 51. Private pension pians:' Percent of full-time

participants by provision for credit for service after age 65,

medium and large firms, 1984

Profes-
+ sional | Techni-
All par- | 80d | cal and | Produe-
Type of credit ticipants |2¢minis-| clerical |tion par-
trative | partici- |tigipants
partici- | pants
pants
Total 100 | 100 | 100 | 100
No credit for service .. 56 59 65 5t
Pension deferred with no change|
in amount 49 51 55 44
Pension deferred, but increased
actuarially 5 4 6 4
Pension deferred, but increased
by percent per additional year
of service* 2 3 3a 2
Pension begins at age 65 .. 1 1 1 1
Credit for service, no actuarial
increase” 43 40 34 49
All service credited .. 25 24 22 27
Service credited to speci
maximum age 7 15 12 at
Service credited to specified
maximum years of service . oO ) “) iy)
Credit for service, with actuarial
increase® 1 1 1 t
All service credited . 1 1 1 1
Service credited to specified
maximum age oO iv) o 0
Service credited to specified
maximum years of service oO - - fu)

‘ Excludes supplemental pension plans.

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

mains active.

° Additional service is included in the benefit formula, but the pension is

ot increased for later retirement date.

* Less than 0.5 percent.

* Additional service is included in the benefit formula and the pension is

increased for later retirement date,

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

tals. Dash indicates no employees in this category.

53



Table 63. Type of plan sponsor: Percent of full-time
participants in health insurance, medium and large firms,
1984

Table 64. Type of plan sponsor: Percent of full-time
participants In lite insurance, medium and large firms,
1984

Profes- Profes-
sional | Techni- sional | Techni-
‘At par. | 293. | cal and } Produc- ‘Atpar.{_ 204 _ | cal and | Produc-
Plan sponsor fieipants adminis-| clerical |tion par- Plan sponsor Aiipants {22TMinis-| clerical | tion par-
trative | partici- | ticipants trative | partici- | ticipants
partici | pants partici- | pants
pants Rants:

100 100 | 100 | 100

Total
Single employer—union-negotiated

plan ar 16 15 98
Single employer—non 59 3B 73 48
Single employer—bargaining status

not known: 10 ab 9 10
Multiemployer* 4 ) 3 6

Employer association? ..

Total .. 400 100 100 100

Single employer—union-negotiated

plan | 27 12 13 43
Single employer—nonunion ‘| 64 | 84 79 46
Single employer—bargaining status

not known 1 8 5 4 6
Multiemployer’ 4] 0 3 6
Employer association? . to) - oy -

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

® Less than 0.5 percent.

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

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

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

* Less than 0.5 percent.

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

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

Table 65. Type of plan sponsor: Percent of full-time

participants in private pension
firms, 1984

plans,’ medium and large

Plan sponsor

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

All par- | and. F
All adminis-| clerical |tion par-
ticipants | trative | partici- | ticipants
partici- | pants
pants

Total ...

Single employer—union-negotiated
n

Single employer—nonunion 7
Single employer—bargaining status
‘not known ......

Multiemployer’.

Employer association*

100 100 100 100

30 9 12 51
84 89 86 39
3 2 2 4
3 i) ia) 6
i) - 2) 1)

1 €xcludes supplemental pension plans.

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

* Less than 0.5 percent.

* Band of small employers in a common trade or business, for example,
automobile dealers. The plan sponsored by the association is not negot-
ated with the participants.

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



Table 22. Health insurance: Percent of full-t
in plans with basic surgical benefits by maximum allowance

for selected procedures, medium and large firms, 1984

time participants

Maximum allowance

All par-
ticipants

Profes-
sional
and

Techni-
cal and

adminis- | clericat

trative
partici-
pants

partici-
pants

Produc-
tion par-
ticipants

Total

Usual, customary, and reasonable
charge
With overatl doliar limit on basic
surgical payments ..
Without overall dollar limit on
basic surgical payments
Plan pays:
80 percent
90 percent
95 percent
100 percent ..

Maximum scheduled allowance .......

Most expensive surgical

procedure:
$201-$300
$301-$400
$401-$500
$501-$750
$751-$1000
$1001-$1250
$1251-$1500 ...
$1501-$2000
$2001-$2500
$2501-$3000
More than $3000 ..
Not determinable?

Appendectomy:
$100 oF less...
$101-$150

$401-$500 ...
‘$501-$750
More than $750
Not determinable®

Tonsillectomy:

$50 or less ......
$51-$100

$101-8150
$151-$200 ...
$201-$300 ...
More than $300
Not determinable’

Hysterectomy:
$200 oF less .
$201-$300 eer
$301-$400
$401-$500 ..
$501-$750 .
$751-$1000
$1001-1250
More than $1250
Not determinable*

100

69

NT wronn

noeansasale

400

76
6

70

ca s ssa a 2
=SFuwee+ “s4us0vesF FansanvraiSa Base

etevoonned

100

74

Sassasnoanas

aFawearnn?

Nou aaws

oe toovuasd

100

64

asonviaoF

nl oookn

nF aavcoas

Sruasaawonoene

* Less than 0.5 percent

2 Information necessary to classify was not provided.

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

tals,

33



Table 23. Health insurance: Percent of full-time participants in
and applicable benefit period,’ medium and large firms, 1984

plans with major medical coverage by amount of deductible

, Professional and Technical and clerical ,
All participants administrative participants participants Production participants
Amount of deductible? Benefit period
t-year | Other 1-year | Other 1-year | Other t-year | Other
Total | period | period | T°! | period | period | T° | period | period | TO! | period | period
Total 100 96 4 } 100 7 3 | 100 98 4 | 100 95 4
Deductible specified .. 99 96 4 | 100 97 3 | 100 96 4 99 95 4
Based on earnings? «m0 5 5 - 5 5 - 6 6 - 5 5 -
Flat dollar amount 94 91 94 92 3 94 90 4 94 91
Less than $25 7) 9) i) ro) ia) 6 0 “) is) vy) 0 iW)
2 1 1 2 1 1 1 ‘) 1 2 1
1 1 iv) iy) = iv) 1) = 1 1 =
18 7 “ 16 16 14 14 oO 20 20 iy)
4 4 1 3 2] 0 4 2 2 5 5 | 0
iv) iv) - O iv) - oO () - Oo Oo -
47 46 1 46 45 1 47 1 49 a7 2
iy) - (y “ - ry) iv) - - - -
1 1 - 2 2 - 1 1 - 1 1 ~
9 8 ) W 10 iv) WW 10 oO 7 6 “)
12 12 oO 4 14 oO 14 14 fe) 10 10 oO
No deductible 1 - - 0 - - “ - - 1 - -

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

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

2 These plans have deductibles which vary by the amount of the partici
pants’ eamings. A typical provision is 1 percent of annual earnings with a
maximum deductible of $150.

* Less than 0.5 percent.

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

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

provisions,’ medium and large firms, 1984

Professional and i ,
Sci Ssionat Technical and clerical i
All participants administrative participants Production participants
Final ‘coinsurance provision Initiat coinsurance
0 | 85 | 90 80 | 85 | 90 80 | 85 | 90 80 | a5 | 90
a per-| per-| per- jor a per-|per-| per- Oth a per-| per-| per- ore o per-|per-| per- on
[cent|cent|cent| cent|cent|cent cent|cent|cent! ‘cent|cent|cent|
Total .|100) 6} 5] 4] 5/100] 85] 5| 6} 4/100] 86] 4! 4) 6/100) 86; 6] 3] 5
Final coinsurance changes to 100
percent ..... 75| 65] 5] 3] 2] 81] 70| 5| 5] 1) 8a] 73] 4) 4/ 1| 69] 58) Gi 2) 3
When covered expenses? within a
year reach:
$1-$2,000 ty} to} =) ) A] 1] ay -] te) | 15) 14) -7 1 OF 9 Bt -) A) e
$2,001-$4,000 20] 19] 1 @) | 25] 23) 1) ©) G | 23) 227) 1} 16) 15) 1) | &)
$4,001-$6,000 25} 22} 1) 4] 1{ 27; 24] 4) 210) | 26] 241 1) 4) @) | 22) 20) 1) | 1
$6,001-$8,000 ai 4f 3}@) a} 6 3} si ey 4] 5} 3} 2) | 4) tol 5] 4 Mi 4
$8,001-$10,000 .. 8) 6 2) eC) 7] 5) 1 2) 10) 7] 2) al 6 0) He)
More than $10,000 ... 4. 33H) O@1 -] 5} 4O; OF -] 3 2] Te] =] 4 3} 0] 7 -
Final coinsurance changes to other than
100 percent ........ .. WO -~) -}@} a a -] -[ 0 yo if -7 -}O)/OlA@] -} -;e@
Coinsurance unchanged ......m ai at) -| 1] 2} sa] ssl -| af 2) 17) 121 -| 1) 4] 3a) 29) -] af 4

* Coinsurance is the percent of covered expenses paid by the
plan. The balance is paid by the employee. If coinsurance provi-
sions varied by the category of medical care, the provision applying
to hospital room and board charges was tabulated,

* Amount of covered expenses described is for each insured per-

son. In rare cases, the limit for the individual and family are identical.
> Less than 0.5 percent.

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

34

|
i
|



Table 46. Private pension plans:' Average replacement rates for specified final earnings and years of service,” medium and
large firms, 1984

Years of service

Fina! annual earings
10 15 20 25 30 35 40

Private pension only

11.0 16.1 21.0 26.0 30.8 35.0 38.9
9.9 14.4 188 23.2 274 31.0 34.3
97 14.2 18.4 22.7 26.6 30.0 33.0
97 14.2 18.5 22.6 26.5 29.7 32.6
97 14.3 18.6 22.7 26.5 29.6 32.3
98 14.4 18.7 22.8 26.6 29.6 92.3

10.6 15.5 203 25.0 29.4 33.3 36.6.1

10.2 148 19.3 23.6 277 312

10.5 15.2 197 24.0 28.1 15 i

10.8 16.7 20.4 24.8 28.9 32.3

11.0 16.2 21.0 25.6 29.7 33.0

11.3 16.6 21.6 26.3 90.4 33.8

40.5 15.4 20.1 24.6 29.0 32.8 36.1

10.1 148 19.4 23.8 279 31.4 34.4

10.5 15.3 20.0 24.5 28.6 92.1 35.0

108 15.9 20.8 25.4 29.5 32.9 35.8

144 165 214 26.1 30.3 33.7 36.5

14 16.9 22.0 26.8 31.0 34.4 37.2

114 167 22.0 27.3 92.5 37.1 as
96 14.0 18.3 226 26.9 90.7 34.2
8.9 13.0 16.9 21.0 24.8 28.1 31.2
85 124 16.2 20.0 23.6 26.6 29.4
8.2 124 15.8 19.3 22.8 25.6 28.2
81 11.8 15.4 18.9 22.2 24.9 27.4

Combined private pension and primary’ Social Security benefit

53.9 59.0 64.0 69.0 73.8 78.0 81.8
49.0 53.5 58.0 62.3 66.5 70.4 73.4
42.4 46.8 51.1 55.3 59.3 62.7 65.7
37.5 42.0 46.3 52.6 54.3 $75 60.4
33.8 38.4 42.7 46.8 50.6 53.7 56.4
30.9 35.5 39.8 43.9 477 50.7 53.3
53.6 58.5 63.3 67.9 72.3 76.2 79.6
49.3 53.9 58.4 62.7 66.8 70.3 73.4
43.2 479 52.4 56.7 60.8 64.2 67.2
38.6 43.5 48.2 526 56.7 60.1 62.9
35.2 40.3 45.1 49.7 53.8 57.1 59.9
32.4 37.7 42.7 47.3 515 54.9 57.6
Technical and
clerical
53.4 58.3 63.0 67.6 72.0 75.8 . 79.0
49.3 54.0 58.5 63.0 67.0 70.5 73.5
43.2 48.0 52.7 57.2 613 64.8 67.7
38.6 43.7 48.6 53.2 57.3 60.7 63.6
35.2 40.6 45.5 50.2 54.4 578 60.6
32.5 38.0 43.1 a78 62.1 555 58.3

‘See footnotes at end of table.

49



Sieeeieennonnganeneed

Table 11. Short-term disability coverage: Percent of
full-time employees by participation in sickness and accident
insurance plans and paid sick feave plans, medium and large
tirms, 1984

Profes-
sional | Techni.
Alem. |. 2nd | cal and | Produc-
Type of plan joyees |2dminis-| clerical | tion em-
PIOYeES | trative | employ-| ployees
employ-| ees
ees

Totat ... 100 | 100 100 | 100

Sickness and accident insurance

27 4 5 50

23 2 4 44

Paid sick leave only 43 67 6t 2

Combined sickness and accident

insurance/paid sick leave ... 24 25 31 20

Wholly employer financed 18 7 22 17
No sickness and accident insurance

oF paid sick leave . | 6 5 a 8

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

Table 12. Paid sick leave: Percent of full-time employees by
type of provision, medium and large firms, 1984

Profes-
sional | Techni-

‘All em. |_ and. | cal and | Produc-

Provision adminis-| clerical | tion em-
Ployees | "trative | employ- | ployees
employ-| ees
ees
Total 100 | 100 | 100 | 100
Provided sick leave 67 92 s2 | 42
Sick leave provided on:
‘An annual basis only! 48 58 65 | 34
A per disability basis only’ . 14 23 18 7
Both an annual and per
disability basis 4 6 7 1
As needed basis . 1 4 1 ()
Other basis® (7) 0 0 0
Not provided paid sick leave ... 33 8 a | 58

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

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

* 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
‘a certain service period.

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



Table 49. Private pension plans:' Percent of full-time:
participants in plans permitting early retirement by reduction
factor for immediate start of payments, medium and large
firms, 1984

Protes-
sional} Techni-
Reduction for each year prior to | All par- ais. cal ane tonne

normal retirement age ticipants |“vative | partick |ticipants
partici- | pants
pants
Total .. 400 | 100 | 100 | 100
Uniform percentage” .. 41 40 43 a
Less than 3.0 4 3 1 1
7 7 8 7
3 3 2 2
5 7 7 3
2 2 1 a
6 7 9 4
19) 0 i) (9)
15 9 13 18
u 9) 1 1
i) W) i) 1)
1 1 1 2
0 (i) 0

56 53 53 59

36 38 35 36

Percentage varies by service

Other basis @ 1) iv) -

Table 50. Private pension plans:'. Percent of full-time
participants by provisions for disability retirement, medium
and large firms, 1984

Profes-
siona! | Techni-
and | cal and | Produc-
All Par- | adminis-| clerical |tion par-

‘Characteristic
ticipants | "trative | partici- |ticipants
partici- | pants
pants
Total with disability retirement
benefits . | 90 | 9 ) 96 |. 92

Minimum requirements for
disability retirement

Total .. 100 | 100 | 100 100

No age or service v7 20 ral 13

Age only .. a a) 19) iv)
Service only 52 39 36 67
‘Age and si 9 8 10 9
Meets qualification for long-term
disability benefits 22 34 32 1"
Benefit provisions
Total 100 | 100 | 100 | 100
Immediate disability retirement’ 62 48 44 79
Unreduced normal formula’ 48 34 32 63
Reduced normal formuta® 7 8 6 7
‘Other than normal formula’ 8 6 7 10
Deferred disability retirement .. 38 52 56 24
With benefits based on:
Service when disabled .. 5 6 8 4
Service plus credit to early
retirement date or tater 3t 45 47 16
Service with some credit 1 1 4 fs)
Not based on service (a) () () )

Excludes supplemental pension plans.

2 (n specific cases, uniform percentage reductions may approximate ac
tuarial reductions, such as early retirement at age 55 with a 6 percent a
year reduction 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 lite
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 3.3 percent for each
year retirement precedes age 60. .Also includes some plans which reduce
benefits arithmetically for each year immediately below normal retirement
age and actuarially below a specified age, usually 55.

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

* Excludes supplemental pension plans.

® Less than 0.5 percent.

2 Immediate disability pensions may be supplemented by additional al-
lowances unti) an employee reaches a specified age or becomes eligible
for Social Security.

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

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

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

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

tals.
‘



Table 66. Other benefits: Percent of full-time employees In establishments providing specified benefits by percent of

employees eligible, medium and targe firms, 1984

51 to 99

110 50

i All workers Data not
Benefit Total percent percent | None eligible
eligible ‘ligible ‘lgible available
Protessional and administrative employees
Paid leave:
Funeral leave 100 88 ) 0 7 5
Military leave .. 100 81 0). 1 14 5
Profit sharing, savings, and stock plans:
100 24 3 1 67 5
100 42 7 0) 45 5
400 4 0) 3 87 5
‘Stock purchase plans 100 18 1 1 74 6
‘Stock ownership plans? .. 100 27 4 ) 63 5
Income continuation pla
‘Severance pay 100 61 3 2 30 5
Miscellaneous benefits:
Employee discounts 100 48 1 0) 46 5
Gifts .. 100 10 i 3 8t 6
In-house infirmary ....... 100 46 2 1 45 5
Nonproduction bonuses 100 20 4 7 87 6
Relocation allowance:
Full defrayment of expenses 100 59 1 5 29 6
Partial defrayment of expense: 100 16 2 3 73. 6
Recreational facilities:
Full defrayment of cost .. 100 7 1 1 76 5
Partial defrayment of cost 100 16 0) 1 7 5
Subsidized meals:
Full detrayment of cost... 100 1 ) i) 99 5
Partial defrayment of cost 100 26 1 2 66 5
Educational assistance:
Full defrayment of expenses 100 29 ’) 0 65 5
Partial defrayment of expenses 100 53 1 1 40 5
Parking:
Provided at no cost 100 68 4 5 19 5
Provided below commercial rates 100 3 0) 2 90 5
‘Company automobile for personal business:
Without reimbursing the company 100 1 1 16 7 5
Partially reimbursing the company ..... 100 2 1 ct) 8 5
Technical and clerical employees
Paid leave:
Funeral leave 100 88 1 V) 6 6
Military leave 100 80 0) (0) 15 5
Profit sharing, savings, and stock plan:
Profit sharing 100 27 2 2 64 5
‘Savings and thrift 100 36 8 3 48 5
Stock bonus plans .... 100 3 ¢) - 9 5
‘Stock purchase plans 100 14 1 ) 73 8
‘Stock ownership plans’ 100 23 5 1 67 5
Income continuation plans:
Severance pay nu... 100 87 2 1 34 5
Miscellaneous benefits:
Employee discounts .. 100 57 1 ) 37 5
Gifts 100 12 1 2 80 6
In-house infirmary _ 100 36 3 3 53 5
Nonproduction bonuses ... 100 22 1 1 70 5
Relocation allowance:
Full defrayment of expenses .. 100 26 0) 3 65 6
Partial defrayment of expenses 100 10 1 2 82 6
Recreational facilities:
Full defrayment of cost...... 100 14 ” t) 80 6
Partial detrayment of cost .. 100 15 ~ ¢) 79 6

See footnotes at end of tabie.



Contents

Page |
Summary - oi
Work schedules , . . 3 i
Paid lunch and rest periods . - 3 |
Paid holidays .......... 3
Paid vacations . . 3
Personal leave .. 3
Short-term disability benefits 3 |
Sick leave plans .......... . 4
Sickness and accident insurance . 4
Long-term disability insurance 5
Health insurance .. .. 5
Hospital coverage . 5
Surgical coverage... .. 6
Major medical coverage . 6
Dental coverage... 7
Mental health coverage. 8
Other benefits ........ 8
Employee contributions . . 8
Funding medium . 9
Life insurance ... 9
Retirement pension plans . . 10
Benefit formulas ... . - 10
Private benefits and Social Security payments. -u
Maximum benefit provisions . 3]
Replacement rates 11
Normal retirement 12
Early retirement. . 12
Disability retirement 14
Postponed retirement ...... 14
Postretirement pension increases. 14
Vesting 15
Postretirement survivor benefits . 15
Preretirement survivor benefits . . 16
Employee contributions ...... 16
Plan participation requirements . 16
Insurance plans .......... 16
Private pension plans ..... 16
Plan sponsors and collective bargaining . 16
Other benefits .. 17
Charts:

Percent of full-time employees (or participants) covered, medium and large firms, 1984:
1. Paid time off.



Table 35. Life insurance: Percent of full-time participants
by method of determining amount of basic life Insurance
and frequency of related coverages, medium and large
firms, 1984

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

All par- 1d
tem ‘ adminis-| clerical | tion par-
ticipants | “trative | partici | ticipants
partici- | pants
pants

Total . 400 | 400 | 100 | 100

Basic life insurance’ ..

Based on earnings 64 84 8t 45
Multiple .. 49 72 69 28
Graduated schedule . 15 12 W 7

Flat amount 34 13 7 53

Fiat amount based on service .. 3 2

Other

With extended coverage during total

and permanent disability .... 98 98 98 97

With accidental death and

dismemberment coverage .. 74 70 67 80

With dependent coverage 7 7 19 16

* A few participants received only accidental death and dismemberment
insurance.

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

? Less than 0.5 percent.

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

=
ey
3

4)



Table 33. Health insurance: Percent of full-time participants in contributory plans by type and amount of employee
contribution, medium and large firms, 1984 .

Professional and

Technical and clerical

All participants administrative participants participants Production participants
Type and amount of contribution
Single Famity Single Family Single Family Single Family
coverage | coverage’ coverage | coverage’ coverage | coverage’ coverage | coverage’

Total 100 100 100 100 100 100 100 100

Flat monthly amount ... 93 93 1 92 93 93 93 94
Less than $5.00 23 5° 2 5 18 4 28 6
$5.00-89.99 .. 18 4 18 9 7 7 20 15
$10.00-$14.99 16 7 8 7 20 6 " 7
$15.00-$19.99 .. W 7 WY 8 16 8 5 7
$20.00-$29.99 .. 10 12 10 "1 10 10 9 13
$30.00-$39.99 .. 2 n 1 10 2 13 3 14
$40,00-$49.99 .. 2 8 1 9 1 12 2 6
$50.00-$59.99 .. Q 9 (a) 9 (9) 9 a) 8
$60.00-$69.99 .. i) 5 Q 4 0 5 6 5
$70.00-$79.99 .. ro) 4 ® 5 - 6 - 2
$80.00-$89.99 .. - 1 - 2 - 1 - 1
$90.00-$99.99 . - 2 - 2 - 2 - 4
$100.00 or greater - 3 - 3 - 4 - 3
Composite rate” .. 4 8 10 7 8 6 16 9
Amount varies by earnings .... 2 1 3 1 2 1 1 1
Contribution not determinable ... 5 6 6 7 4 7 5 5

* 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 smail percentage of employees, the employee contributes
the same amount for single and family coverage.

? Less than 0.5 percent.

* A composite rate is a set contribution covering more than one bene-

39

fit area, for example, health insurance and sickness and accident insur-

ance. Cost data for individual plans cannot be determined.

NOTE; Because of rounding, sums of individual items may nat equal

totals. Dash indicates no employees in this category.



Table A-
firms, United States,’ 1984

Estimated number of establishments and workers: within scope of survey and number studied, medium and large

Minimum Number of workers in establishments
. employment in| Estimated
Industry divisio establishments | number of Professional ,
within scope of | establishments | Total? and Technica) and Production
survey administrative
7
i alge
Within scope of survey* A Role
Al industries . - 48,007 29,599,208 | 5,924,711 | 5,249,586 | 10,444,668
Manutacturing 19,862 11,989,993 | 2,567,491 | 1,652,062 7,541,882
- 25,658 11,543,395 | 2,757,220 | 3,691,524 2,902,788
« 250 740 ‘366,675 83,533 $8,027 221,354
Construction .. 250 670 366,27 65,017 36,591 221.381
Transportation, communications, el ic, gas,
sanitary services + 400-250 4a72 2,681,520 875,132 637,996 1,199,128
Wholesale trade 100 5,528 4,072,024 355,817 312,192 ‘304,320
Retail trade ..... 250 4,034 3,469,122 355,084 718,711 383,681
Finance, insurance, and real estate 100 7,102 2,698,149 272241 | 1,518,999 97,035
Selected services” * 50-100 3,113 880,628 450,395 310,267 35,893
Studied?
All industries 1,326 3,961,379 | 1,038,412 861,669 1,706,820
Manufacturing . 636 2,982,287 640,863 340,458 4,929,694
691 1,529,142 397,549 521,211 377,126
26 30,040 12.557 8.454 8,569
30 51,584 15,632 9,163 20.527
163 669,130 162,183 191,053 259,294
82 92,310 12,809 10,708 6,098
148 338,635 36,864 83,968 71,575
173 330,134 114,040 194,423 5,620
aa 77,308 43,464 23,444 5,463

* Excludes Alaska and Hawaii,
* As defined in the 1972 edition of the Standard Industrial Classification
Manual, U.S, Office of Management and Budget,

3 This figure includes out-of-scope workers. These workers~executive
management, part time, temporary, seasonal, and operating personne! in
constant travel status (@.g., airline pilots)-are excludad from the counts of
employment by occupational group.

«" Number of establishments and workers shown within the scope of
the survey aro estimates. These estimates differ from those developed in
the 1984 PATG survey, since each is based on the findings of its

respective survey.

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

available State Unemployment Insurance (UY) reports
for the 48 States covered by the survey and the Dis-
trict of Columbia. The reference date of the available
UI reports was generally March 1982. The refinement
procedures included an effort to ensure that most sam-
pling frame units corresponded to the definition of an
establishment developed for this survey. (A small num-
ber of sampling frame units were not refined to corre-
spond to the definition of an establishment because of
limited company reporting ability.)

Sample design

The sample for this survey was a subsample of the
1984 PATC sample to reduce the costs and resources
required for data collection. The sample of 1,499 estab-
lishments” was selected by first stratifying the sampling

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

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

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

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

frame by broad industry group and establishment size
group based on the total employment in the establish-
ment. The industry groups consisted of the eight major
industry divisions, as defined by the Office of Manage-
ment and Budget, which are covered by the survey and
shown in table A-1.

The establishment size groups are defined as follows:

Establishment
employment

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

1,000-2,499

2,500-4,999

5,000-9,999
10,000 and over

Employment size



Percent

80

40

1980 1981

Chart 5. Trends in wholly employer-financed health insurance: Percent of full-time
employees covered, medium and large firms; 1980-84

1984

Exact data on the amount of an employee’s contri-
butions for health benefits sometimes were not avail-
able because payroll deductions applied to an insurance
policy covering both health insurance and one or more
other benefits. However, where the amount was re-
ported, employee premiums for single and family cov-
erage averaged approximately $12 and $36 a month,
respectively—up 17 and 10 percent from 1983. In some
instances, included in the calculation of average em-
ployee premiums, employees contributed only for a sup-
plemental plan, such as an optional dental plan financed
jointly by employer and employees. Employee pre-
miums were slightly higher for technical-clerical par-
ticipants than for the other two groups.

Funding medium. Employers typically arrange for
health care coverage of their employees through the
purchase of commercial insurance policies or Blue
Cross-Blue Shield plans. These arrangements covered,
for example, 67 percent of the health insurance partici-
pants with basic hospitalization benefits in 1984, and 63
percent of those with major medical benefits.
Independent health plans, however, have been grow-
ing in importance. In 1984, at least one-fourth of the
workers receiving the benefits tabulated in table 34 were
under self-insured plans of individual employers or }a-
bor-management groups. Such self-insurance was most
prominent as a source of major medical and dental bene-

fits. Employers commonly contract with commercial
insurers to protect their self-insured plans against
medical claims exceeding a predetermined maximum
dollar amount.

About 5 percent of the health insurance participants
covered by the survey were enrolled in Health Main-
tenance Organizations (HMO’s). An HMO is a prepaid
health care plan that delivers comprehensive medical
services to enrolled members for a fixed periodic fee."

Life insurance

(tables 35-38)

Nearly all full-time employees within the scope of
the survey participated in life insurance plans in 1984;
four-fifths had the cost of a basic plan paid wholly by
the employer. Life insurance coverage has improved
since 1979, either through an increase in specified
amounts of insurance or through a liberalization of the
formula for determining benefits.

Basic coverage for nearly two-thirds of all life insur-
ance participants was based on their earnings, enabling
the level of protection to automatically increase with a
rise in pay. Earnings-based formulas were much more
prevalent among white-collar workers (82 percent) than

© HMO plans and plans provided through the more traditional health
insurers are compared by Allan Blostin and William Marclay in
“HMOs and Other Health Plans: Coverage and Employee Premiums,”
Monthly Labor Review, June 1983, pp. 28-33.



Table 48. Private pension plans:' Percent of full-time participants by minimum age and associated service requirements for
early retirement,’ medium and large firms, 1984

Protes- Profes-
sional Technical sional | Technical
a Produc- Produc:
i I par -| . . leri-|
Age and service requirements? | (41 Par. | and ad Jand cer lon pa| Age and service requirements toxenta are oe fend par ton par
tive par- | ticipants | Hcipants tive par- | ticipants | iP
ticipants ticipants
Total 100 100 100 100
. ‘Age 55—Continued
Participants in plans permitting 20 years’ service 3 3 4 3
early retirement .... 97 96 97 97 25 years’ service ) 7) 6 “
No age requirement .. 5 10 6 3 || Age 56-59 2 2 1 2
10-20 years’ service 1 1 “ 1
1 1 1 ) 30 years’ service 1 1 1 i
30 years’ service 5 9 5
10 5 7
Less than age 55... 7 4 9 8 1 1 1 i)
No service requirement ro) oO ro) r¥) fy) - > oO
5 years’ service 1 1 1 0) 40 years’ service 5 1 1 8
10 years’ service 1 1 1 1 16 years’ service 5 3 1 8
15 years’ service 1 1 1 1 20 years’ service ) ~ - o)
20 years! service is) i) ) i) 30 years’ service ) 0 -
25 years’ service 3 i) 4 5 i
Age 62 .. QO 19) iv) iv) :
iv) - - “) 10 years’ service oO “ oO oO. |
62 66 68 87 Sum of age plus service 10 9 9 10
9 9 8 9 Equals 70 or less . 1 2 2 1
1-4 years’ service ) “ “ rv) Equals 75 1 1 3 y)
5 years’ service 4 5 5 2 Equals 76-79 1 1 2 1
6-9 years’ service “ (3) - a Equals 80 1 1 1 Oo
10 years’ service 39 at 43 38 Equals 85 5 3 2 8
11-14 years’ servics oO 1 ) “
15 years’ service 7 7 8 7 |[Participants in plans without early
retirement .. 3 4 3 3
‘Excludes supplemental pension plans. specity an age, it was the requirement tabulated,
? Early retirement is defined as the point at which a worker could re- * Less than 0.5 percent.
tire and immediately receive accrued benefits based on service and :
earnings but reduced for each year prior to normal retirement age. NOTE: Because of rounding, sums of individual items may not equal
* If a plan had alternative age and service requirements, the earliest totals... Dash indicates no empioyees in this category.

age and associated service were tabulated; if one alternative did not

51


Table 55. Private pension plans:' Percent of full-time
participants by provision for preretirement survivor annulty,
medium and large firms, 1984

Profes-
sional | Techni-
Type of annuity for surviving | All par- adn a and noe
spouse’ ticipants | aminis-| cl lon par-
trative | partici. | ticipants
partici- | pants-
pants

Total 400 j 100 | 100 100

Preretirement survivor annuity

provided 99 99 98 99
Equivalent of joint and survivor
annuity’ ... | 74 70 69 72
Based on early retirement’ ...| 63 63 60 65
50 percent of employee
pension .. 46 42 43 49
At extra employee
cost® 12 12 W 14
51-99 percent of
employee pension .. 7 5 5 a
At extra employee
cost’. 1 6 - - 1
100 percent of employee
pension .. | 3 4 3 2
At extra employee
cost? iv) iv) iv) iy)

Alternative percentages
of pension at em-

ployee’s option 7 1 9 4
At extra employee
cost® 2 4 3 1
Based on normal
retirement’... 8 8 3 7

At extra employee cost!

Portion of accrued employee

benefit . eel 22 22 27 20
Reduced for early
retirement 14 19 16 13
Unreduced for early
FOAM eens | 7 8 9 6
Based on service projected
to normal retirement date 2 2 2 1
Other annuity? 5 6 3 7
No preretirement survivor annuity
pravic 1 1 2 1

‘ Excludes supplemental pension plans.

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

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

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

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

® Less than 0.5 percent.

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

* Includes annuity based on a dollar amount formula or percent of eamn-

ings.

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

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

57



typically applied one rate to annual earnings below a
specified amount, and a higher rate above that amount.
The balance of formulas applied a uniform rate to all
earnings. These uniform rates averaged 1.67 percent per
year of service in terminal earnings formulas and 1.45
percent in career earnings formulas. Thus, terminal earn-
ings formulas not only provide a higher earnings base
than career formulas,” but the percentage rates also are
often higher. However, benefits under a terminal earn-
ings formula were more likely to be offset by a retiree’s
Social Security payments. (See next section.)

Most plans that did not use a percent-of-earnings
benefit formula specified a dollar amount to be paid for
each year of service, such as $15 monthly per year of
service, yielding a pension of $450 after 30 years. Dol-
lar-amount formulas applied to 28 percent of pension
plan participants. While the dollar amount in these for-
mulas frequently varied with an employee’s earnings,
the predominant method was to multiply a uniform dol-
lar amount by years of service. Uniform amounts cred-
ited per year averaged $14.44 a month.

The basis of payment differed sharply by employee
group. While a large majority of white-collar workers
were provided earnings-based pensions, dollar-amount
formulas applied to half of the production employees.

Thirty-seven percent of all participants were in pen-
sion plans providing benefits from either primary or al-
ternative formulas, whichever was greater. Alternative
formulas were often included to provide at least a mini-
mum 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 career average earnings times
years of service, and an alternative formula of $15 a
month for each year of service. In this case, the alter-
native formula would provide a higher benefit for per-
sons with career average annual earnings less than
$14,400.

Private benefits and Social Security payments. Em-
ployers providing private pension plans also share the
cost of Social Security coverage equally with their em-
ployees. Because many plan sponsors feel that private
pension and Social Security benefits should not be
duplicative, formulas for calculating private pensions
often contain an offset provision requiring part of the
Social Security pension to be subtracted from the an-
nuity. Other plans have “excess” formulas that apply
lower rates to an employee’s earnings below a specified
Jevel (which is either the Social Security taxable wage
base—usually the career average—or a dollar amount
equal to a past taxable wage base).

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

Fifty-six percent of all participants were in plans
where benefit formulas were “integrated” with Social
Security. Terminal earnings formulas of integrated plans
tended to adopt the offset approach, while career earn-
ings formulas tended to incorporate the excess approach.
Dollar amount formulas were rarely coordinated with
Social Security; blue-collar employees, therefore, were
less likely to have integrated benefits.”

Maximum benefit provisions. The Employee Retire-
ment Income Security Act of 1974 (ERISA) places ceil-
ings on the size of annual pension benefits; this restric-
tion largely affects only highly compensated employ-
ees. Many private pension plans, however, have provi-
sions that restrict benefit levels for all participants. For
example, one-third of participants were in plans that
limited the number of years of service included in bene-
fit computation; maximums of 30 or 35 years were most
common. For one-tenth of the participants, annual pen-
sions (usually including Social Security payments) could
not exceed a specified percent of average annual career
or terminal earnings.

Replacement rates. A commonly used indicator of pen-
sion adequacy is the portion of a retiree’s final year’s
earnings that is “replaced” by the retirement benefit.
To calculate replacement rates under 1984 pension
plans, the maximum private benefit under each surveyed
plan, not reduced for early retirement or joint-and-sur-
vivor annuity, was determined under several assumed
combinations of final annual earnings and years of serv-
ice. These benefit levels were then expressed as per-
cents of earnings in the last year of employment. The
calculations assume employees retired on January 1,
1984, and final earnings are for 1983."

Table 46 presents average replacement rates result-
ing from private pension plans alone and in combina-
tion with primary Social Security benefits (that is, ex-
cluding benefits for spouse and other dependents). For
private pension formulas that are integrated with So-
cial Security 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. (For
workers who reached age 65 in 1984, however, the So-
cial Security benefit was the same for workers with

For a comprehensive analysis of formulas with Social Security
integration characteristics, see Donald Bell and Diane Hill, “How
Social Security Payments Affect Private Pensions,” Monthly Labor
Review, May 1984, pp. 55-60.

“Earnings histories, necessary for applying the pension formulas,
were constructed for each final earnings level based on data provided
by the Social Security Administration.

'SThe Social Security spouse benefit, which is 50 percent of the
primary benefit, is paid in addition to the primary benefit while both
partners are alive (unless the spouse is eligible for a larger primary
benefit). Upon death of either partner, the primary benefit is then
continued to the surviving spouse until death or remarriage.



Preface

This bulletin presents results of a 1984 Bureau of La-
bor Statistics survey of the incidence and provisions of
employee benefits in medium and large firms. This sur-
vey—the sixth in an annual series—provides representa-
tive data for 21 million full-time employees in a
cross-section of the Nation’s private industries. It was
initially designed to provide the Office of Personnel
Management with information on private sector prac-
tices for use in comparisons with benefits of Federal
workers. The survey’s scope, therefore, is the same as
that of an annual Bureau survey of occupational sala-
ries in the private sector—National Survey of Profes-
sional, Administrative, Technical, and Clerical Pay—
which is currently used in the Federal pay comparabil-
ity process for white-collar workers. Appendix A pro-
vides a detailed description of the scope and statistical
procedures used in the benefits survey.

iii

The reader is cautioned against analyzing trends be-
ginning with a pilot survey in 1979. Due to the experi-
mental nature of the initial surveys, differences in the
results reflect not only changes in benefit practices in
private industry, but also improvements in procedures
and techniques since the earlier studies. Nevertheless,
several changes have been identified in this bulletin that
demonstrate actual trends in benefit provisions.

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

Pictured on the cover of this bulletin is Gone Fishing
by Norman Rockwell, reprinted with permission from
The Saturday Evening Post (c) 1930 by The Curtis Pub-
lishing Company.



——ey

}
au
[ ‘ Table 21. Health insurance: Percent of full-time participants in plans with basic Hospital room and board coverage by
dE type of benefit payments and limits to coverage, medium and jarge firms, 1984 |
j 5 " é “ |
i Subject to limit on days of coverage per hospital confinement’ Subject to
H Type of payment Total Under 120 421 - 364 966 da other Unlimited |
: ys | ones
Alt days | 20 days | “Gay | 965 days | MMH | limits?
Alt participants
Total 100 70 W 19 4 31 4 18 12
Daily dollar allowance 6 5 3 1 io) 1 a) 1 -
Less than $50 1 0 0) 0 - - @ - H
$50-$74 1 1 1 e - ~ - i] -
$75-$99 1 1 1 0) iv) iy) - (a) -
$100-$124 1 1 1 1) - 0) ° - -
$125 or more 1 1 1 °) - iy) i) -
Semiprivate rate 94 65 8 18 4 31 4 17 12
| Professional and administrative
Total .. 100 65 10 20 3 29 3 22 13
. Daily dollar allowance 4 2 1 0) 1 - iu) - |
Less than $50 ral ay - - - - ray -
$50-$74 9) ie) - - - - - - |
fn $75-$99 1 1 1 is) - ~ - - i
i $100-$124 1 ro) - - ry) - ~ -
i $125 oF more .. 2 1 iv) - iy) ~ 19} =
‘Semiprivate rate 61 8 19 3 28 3 22 13
Technical and clerical i
Total 100 65 10 2a 4 25 3 20 15
Daily dollar allowance .. a 3 1 1 ) ie) is) 0 -
Less than $50 ° (a) 6 - - - e -
$50-$74 ro) eo ra) - - - - ¢) -
$75-$99 1 1 °) 1 iy) - - -
$100-$124 eo 0 () - - e iv) - -
$125 oF mor 1 1 e) ig) - © = iy) ~
Semiprivate rate 97 62 9 22 3 25 3 20 15
Production
Total 100 75 12 18 5 35 6 15 c
Daily dollar allowance .. 8 4 2 - 1 e -
Less than $50 .. 1 rs) e e - - -
$50-$74 . 2 1 1 i) - - - -
$75-§99 ..... 2 1 1 0 - ia) ~ >
$100-$124 2 2 1 1 - - ° - -
$125 or more 1 1 1 0 - 9) = iv) - |
Semiprivate rate 92 69 9 16 5 34 6 14 9
* In some plans, the limit on days of coverage varied by length of specified time period.
Participation in the plan; in these cases, the participant was assumed to * Less than 0.5 percent
have been in the plan for 15 years,
* Includes workers in plans where the basic benefit is limited by a NOTE: Because of rounding, sums of individual items may not equal
maximum dollar amount per confinement or per year, and other plans _ totals, Dash indicates no employees in this category.
where the limit on the number of days of coverage applies within a
i
i
i

i) 32



* Less than 0.5 percent, tended vacations. Dash indicates no employees in this category.

Table 7. Paid vacations: Percent of full-time employees by amount of paid vacation provided at selected periods of
i service, medium and large firms, 1984
i
i Profes- Profes-
H sional | Techni- sional | Techni- |
i Allem. |_2d__ | cal and | Produc- Alem. |_ 29d | cal and | Produc- i
ql Vacation policy loyens |Adminis-| clerical | tion em- Vacation policy foyeos |2dminis-| clerical | tion em- |
P| Ploy trative | employ- | ployees Ploy trative | employ- | ployees
i employ-| ees employ-} ees
i ees ees
Total .. 100 | 100 | 100 | 100
|At 15 years of service:
In plans providing paid vacations 99 99 100 99 5 days 1 (9) (9) 1
Over 5 and under 10 days ro) ~ is) a
‘At 6 months of service:' 10 days .. 3 1 2 5
Under 5 days .. 7 4 5 10 Over 10 and under 15 days (a) (9) (o) °
5 days ... 39 49 48 30 15 days . 28 20 23 34
Over 5 and under 10 days . 10 14 18 5 Over 15 and under 20 days a 3 3 3.
4 7 6 2 20 days .. 69 68 52
i] lo) i] - Over 20 and under 25 days 2 2 1 2
H iG) 1 to) ~ 25 days . 2 2 2 1
H iv} 1 - i) Over 25 days ..... 1 1 1 1
i [At 20 years of service:
q © | @ | ® | @ [f° Under 10 days. o!alea 1
30 7 13 51 10 days ... . 3 1 1 5
1 e e 2 Over 10 and under 15 days is) (a) 0) io)
t 62 79 83 43 15 days 9 6 7 13 |
Over 10 and under 15 days 2 3 3 1 ‘Over 15 1 1 rs) 1 i
: 15 days. 3 8 1 1 20 days - 56 60 66 49
q Over 15 days ... 1 2 fe) fo) Over 20 and under 25 days 3 4 3 3
25 days ... 28 26 2t 26
At 3 years of service: ‘Over 25 and under 30 days 1 1 1 1
] Under 5 days | @ 0 e co) 30 days Q Q Q io)
5 days ... 4 1 1 6 Over 30 days is} fel fe) 1
: Over 5 and under 10 days ... 1 - iy) 1
; 10 days .. 80 76 87 79 |/At 25 years of service:
Over 10 and under 15.days 8 7 6 10 Under 10 days .. te) ie) v) 1
i 15 days..... 5 12 5 2 10 days... 3 1 1 5
\ Over 15 and under 20 days e 1 i) ro) Over 10 and under 1 i) ro) e io)
i 20 days .. 1 2 ry) eo 15 days ..... 8 6 6 10
Over 20 days i) 1 ta) Over 15 and under 20 days . io) 1 (a) is)
20 days .. 30 34 35 26
ALS years of service: Over 20 and under 25 days 2 3 3 2
Under 5 days i) i) i) ie) 25 days ...... 48 48 48 47
5 days 1 i) 1 1 Over 25 and 1 1 1 1
‘Over 5 and under 10 days @) = 19) 19) 30 days ........ 5 5 4 5
10 days 47 32 39 59 Over 30 days 1 1 1 1
Over 10 and under 7 7 6 7
15 days... 42 54 51 31. |/At 30 years of service:
Over 15 and under 20 days .. 1 2 1 a) Under 10 days ° ® i) 1
20 days ... 1 3 1 io) 10 days 3 1 1 5
Over 20 days fa) 1 is} } Over 10 and under 15 days iv) fe) () ®
15 days .... : 8 6 6 10
At 10 years of service: ‘Over 15 and under 20 days .. e i) ro) i)
5 days ... 1 a) ro) 1 20 days 29 33 34 24
Over 5 and under 10 days e - le) ie Over 20 and under 25 days .. 1 1 1 1
10 days... 6 3 3 10 25 days .... 43 42 45 43
‘Over 10 and under 15 days 1 () 1 1 ‘Over 25 and under 30 days 1 1 1 1
4 15 days ... 68 64 74 66 30 days 10 12 9 10
i Over 15 and under 20 days 7 6 4 9 Over 30 days . a 2 2 3
: 20 days 18 25 v7 10
i | Over 20 days 1 2 1 1
: " Excludes situations where employees are credited with vacation * Provisions were virtually the same after longer years of service,
at days during the first 6 months of service but, as a matter of establish-
ai ‘ment policy, must wait beyond 6 months before taking those days off. NOTE: Data include anniversary year bonus days and exclude ex-



Employee Benefits in Medium
and Large Firms, 1984

U.S. Department of Labor
William E. Brock, Secretary

Bureau of Labor Statistics
Janet L. Norwood, Commissioner
June 1985

Bulletin 2237

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



Table 40. Private 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, 1984

Provision for Provision for
Provision for | _ Integration with Provision for | integration with
maximum benefit? Social Security maximum benefit? Social Security
Type and amount of | roy benefit Type and amount of | yop benefit
form , formut
Subject | Not sub- [With inte-| Without Subject | Not sub- |With inte-) Witnout
to maxi- | ject to grated grated to maxi- } ject'to grated rated
mum |maximum| formula | (or ila mum |maximum| formula | Se
All participants \Technical and clerical
Total 100 100 100 100 100 Total ... 100 100 100 100 100
49 St 46 48 61 40 48 82
1 t) 2 - ry) 4 - 3
4 1 7 1 1 3 oO 14
6 2 12 5 2 7 7 23
20 20 20 22 22 16 19 24
5 5 4 6 7 3 8 -
12 19° 1 13 25 4 13 at
2 4 - 3 8 - 3 -
51 49 54 62 39 60 52 18
22 24 19 16 15 24 20 16
24 22 26 2 at 24 25 -
2 1 4 2 1 7 4 1
By earnings and
4 2 5 8 - service 3 2 5 4 -
Production
Total .. 400 100 100 100 100
100 100 100 100 100
Flat percent per year of
ic 43 40 48 48 33
52 53 49 49 69 1 - 4 - 4
1 0 1 - 5 5 1 4 1 14
4 1 7 1 23 4 1 9 3 6
5 2 9 4 12 7 16 a 23 6
23 23 24 24 19 3 4 3 5 -
6 5 6 7 - W 7 oO 15 3
10 16 2 10 9 1 2 - 2 -
3 5 - a} -
57 60 52 52 67
48 47 51 5t ci} 28 7 13 9 67
19 1 19 7 30 23 19 30 Ky -
25 26 25 30 - By age 1 - 2 1 -
1 1 2 1 1 By earnings and
service .. 5 4 7 7 -
3 2 5 3 -
* Excludes supplemental pension plans. * Less than 0.5 percent.
2 ita plan contained more than one terminal eamings formula, a pri-
mary formula was selected and tabulated, NOTE: Because of rounding, sums of individual items may not equal
2 These maximum provisions are independent of ERISA-imposed ceil- totals. Dash indicates no employees in this category.

ings on pensions payable from defined benefit plans.



Table 17. Sickness and accident insurance: Percent of full-time participants with benefits based on percent of
earnings formula by maximum weekly benefit, medium and large firms, 1984

Maximum weekly benefit
Type of payment Total | Total | Less | $80 | $100 | $120 | $140 | $160 | $200 | $250 { $300 | maxi-
q with than to to to to to to to or mum
i maximum| 80 | $99 | $119 | $139 | $159 | $199 | $249 | $299 | more
fh Ait participants
Total ... 100 n rv) 2 5) 19) 14 4] 10 4| 13] 2
i Fixed percent of earnings .. 92 7o | () 2 5) 19 | 14 4] 10 4 12) 22
50-54 3t a | oO 2 1 15 3 1 2 1 1 5
1 1 - - - ~ | - yy o- 1 0 - 10
28 i | 1 1 3 1 1 6 1 6 9
22 16 - 0) 1 () 97 0 1 ) 4 6
10 7 Y - 10 ayo 1 1 2 3
Percent of earnings varies a 1 - - - - - -10 0) 1 7
a Professional and administrative
i Total 100 7 | ¢) 1 1 20 4 2 9 20 | 30 !
Fixed percent of earnings .. 87 69 ) 1 1 20 W 2 9 4 20. 18
50-54 29 2a | 0) - 1 19 1 1 1] 0 5
1 1 - - - - 1 - - - -
30 24 Oo 1 ~ 1 - (9) 7 3 12 6
19 15 - v) 0 ) a} 0) 1H 0 4 4
8 5 - - 1 Yo ) 0 0) 3 3
Percent of earnings varies 13 1 - - - - - - Yo to) 0) 12 |
Technical and clerical
Total 7m | 1 7] 2] 43 3 7 3 | 12] 30
Fixed percent of earings cr) 6 | () 1 7} 2] 43 3 3| 10} 2
50-54 35 30 Y 0) 1 22 4/0) 1 1 0 5
55-59 1 1 - ~ - - 1 - - -1o
60-64 22 13) 0) 1/1 0 2/ 0 1 3] oct 4 9
65-69 7 15 - ’) 2] 0 Y 1] 3 3
70 oF more 13 9 - - 4 1] 0 0 1] 0 2 4
Percent of earnings varies .. 12 2 - - - - - - 1) 1) 1 10
Production
Total . 100 72 1 3 5| 6] 16 4] 43 4} 1 | 26
Fixed percent of earnings 97 72 1 3 5} 16] 16 4] 42 4] 10) 2
30 26 - 3 1 10 3 2 3 1 1 4
1 1 - - - - ~ 0 - ) - 0
3 2 () ie) 2 2 1 6 1 3 10
27 18 - - 11 oO 10 1 2/1 0) 4 8
8 6 9) - 0) 0 1 + 4 1 2 2
Percent of earnings varies .. 3 1 - - - - - - iv} - 1 2
* Less than 0.5 percent. NOTE: Because of rounding, sums of individual items may not
equal totals. Dash indicates no employees in this category.
i



Table 27. Health insurance: Percent of full-time participants
in plans with dental benefits by deductible provision,"
medium and large firms, 1984

Table 29. Health insurance: Percent of full-time participants
in plans with orthodontic benefits by lifetime maximum
amount of coverage, medium and large firms, 1984

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

All par-

Type of deductible’ feipants

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

Ail par-

Dollar amount ficipants

pants
Total ...... 100 100 100° | 100
Subject to basic dental deductible’ ..) 65. 68 70 61
Yearly deduotible ... 56 60 6 52
1 1 1 1
28 30 29 27
1 2 1 i
23 23 25 22
a 4 4 2
9 8 10 9
1 1 i) 1
7 7 9 7
1 1 1 1
Subject to major medical
deductible .. 6 6 7 6
No deductible 29 26 23 33

* Excludes separate deductibles for orthodontic procedures.

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

 Beductibles may not apply to all covered dental procedures. if more
than one deductible amount applied to separate 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.

Table 28. Health insurance: Percent of full-time participants
in pians with dental benefits by yearly maximum amount of
insurance,’ medium and large firms, 1984

Pants
Total .. 100 100 100 100
Lifetime maximum specified 95 95 92 96
Less than $500 () () cv) oO
$500 15 14 15 15
$501-$749 .. 8 6 4 W f
$750 16 18 16 16 b
$751-$999 12 W 8 15 1

|

$1,000... 36 7 39 33 1

$1,001-81,49 1 1 1 1 i

$1,500. 4 4 5 3 |

Greater than $1,500 2 3 3 1 |
No lifetime maximum 5 5 8 4

* Less than 0.5 percent.

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

Table 30. Health insurance: Percent ot full-time participants
in plans with vision benefits by extent of benefits, medium
and large firms, 1984

Profes- Profes-
sional | Techni- sional | Techni-
All par. |. a94_| eat and | Produc- At par- |_ 2d} cal and | Produc:
Dollar amount ticipants |@2minis-| clerical tion par- Benefit ticipants |24minis-| clerical | tion par-
trative | partici- |ticipants trative | partici- | ticipants
pants partici- | pants
pants
Total . 100 | 100 } 100 | 100 Total setnennmncnne| 100 | 100 | 100 | 100
Yearly maximum specified’ ..... 93 92 93 95 Eye examinations OMly ccccesennne| 13 17 18 40
Less than $500 1 °) (a) 1
4 6 Examinations and eyeglasses . 6 4 8 7
2 2 1 2
21 22 at at Examinations, eyeglasses, and
2 1 0) 2 contact lenses 7 68 66 75
48 45 46 50
5 5 5 4 Orthoptics' only ese 5 4 6 4
6 9 8 4
4 5 6 3 Other combinations .. 5 6 6 4
No yearly maximum 7 8 7 5

* Includes ali covered dental procedures except orthodontia. Amount
of maximum specified is for each insured person,

? If more than one yearly maximum applied ta separate procedures, the
sum of the maximums was tabulated.

> Less than 0.5’ percent.

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

‘ Exercises to improve the function of the eye muscles.

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



Table 13. Pald sick leave: Percent of full-time employees by sick leave provision, medium and large firms, 1984,

Protes- Profes-
sional | Techni- sional | Techni-
Aitem: |_2nd._| cal and | Produc- Al ‘and | cal and | Produc-
Sick teave policy’ ployees adminis: | clerical |tion em-| Sick leave policy’ eM- | adminis- | clerical | tion em-
trative | employ- | ployees' . Ployees | "trative | emplay- | ployees
employ-| ees employ-| ees
ees ees
Total yoo | 100 | 100 | 100
. Sick leave provided
Provided sick leave? .. 67 92 92 42 annually’—Continued
Sick leave provided Unused sick leave provision:
annually” 51 64 73 34 Carry-over only 16 18 24 4
Cash-in only .. 5 2 5 6
At 6 months of service: Cash-in and carry-ov' 3 1 3 4
Under 5 days . "1 10 15 9 No provision 28 43 4 13
5 and under 10 days 16 19 25 9 Data not available (o) 1 ) )
40 and under 30 days . 1 at 17 3
30 and under 60 days...) 1 2 1 V) Sick leave provided on a per
60 and under 120 days 1 2-| 4 iv) disability basis 7 29 25 7
120 days or more 1 3 1 0
At 6 months of service:
At 1 year of service: Under 5 days ... 1 1 1 rv)
Under 5 days 3 1 2 5 5 and under 10 days 4 7 5 1
5 and under 10 days .. 19 15 27 7 10 and under 30 day: 3 7 6 4
10 and under 30 days 22 34 36 9 30 and under 60 days 1 2 2); 0
30 and under 60 days 2 5 3 i) 60 and under 120 days 1 2 1 0)
60 and under 120 days 2 4 2/1 0 120 days or more .. 3 7 3 6
120 days or more .. 2 4 1 1
At 1 year of service:
Under 5 days .. 1 1 2 1
2 1 2 a 5 and under 10 days 2 4 3 1
16 12 20 16 10 and under 30 days 4 7 7 1
7 22 28 9 30 and under 60 days .. 2 5 a i)
30 and under 60 days 6 10 1 2 60 and under 120 days .. 1 3 1 6
60 and under 120 days 6 12 9 2 120 days or more 3 7 3 1
420 days or more .. 3 7 2 1
At 6 years of service:
At 10 years of service: Under 30 days .... 3 5 1 1
Under § days ... 2 1 ) 3 30 and under 60 days 3 4 5 1
5 and under 10 days .. 45 12 19 15 60 and under 120 days .. 7 4 10 4
10 and under 30 days .. 16 2 25 8 120 days or more 4 9 4 1
30 and under 60 days 4 6 7 2
60 and under 120 days 8 12 4" 4 At 10 years of service:
420 days or more .... 6 43 8 1 Under 30 days 2 3 3 1
30 and under 60 days 2 a 3 )
At 15 years of servic 60 and under 120 days .. 7 10 10 4
Under 5 days «...- 2 ) 1 3 120 days or more ... 6 13 ? 1
5 and under 10 day: 18 72 19 15
10 and under 30 days 16 20 25 8 At 15 years of service:
30 and under 60 days .. 2 3 4 1 Under 60 days .. 3 5 6 1
60 and under 120 days...| 7 " "1 3 60 and under 120 days . 4 7 6 1
120 days OF MOLE nm 8 7 12 2 120 days or more «. 10 7 12 5
‘At 20 years of service: At 20 years of service:
Under 5 days 2 i) 1 3 Under 60 days 3 5 6 1
5 and under 10 days 15 12 19 15 60 and under 120 days 4 7 6 1
40 and under 30 days...) 15 20 25 8 120 days or more 10 7 12 5
30 and under 60 days...) 2 2 3 1
60 and under 120 days...| 7 " 10 4 At 25 years of service:*
120 days oF more ~) 8 18 13 2 Under 60 days .n.- 3 5 6 1
60 and under 120 days 3 5 5 1
At 25 years of service: 120 days or more. 10 19 13 5
Under 5 days .. 1 i) 1 1
5 and under 10 days 16 12 19 7 ‘As needed basis’. 1 1 ro)
40 and under 30 days...) 15 20 25 8 Other basis® ... i) 0 ) i)
30 and under 60 days ....| 2 2 3 1
60 and under 120 days ... 5 8 8 3_||Not provided paid sick leave .... 33 8 8 58
120 days or more ... 1 22 15 3

7 Some plans grant sick leave at partial pay, either in addition or as
‘an alternative to full-pay provisions. Employees receiving partial pay:
only of 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,

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

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

‘number may vary by length of service.

* Less than 0.5 percent.

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

© Sick ieave is provided on a per iliness or per cisabilty basis. This
number may vary by length of service.

7 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
after a certain service period.



medical plans, medium and large firms, 1979-84

Percent
60

50

40

30

20

1979 1980 1981

Chart 3. Trends in selected deductible amounts: Percent of full-time participants in major

1982 1983 1984

limitation was $250,000. However, since many plans
specified higher amounts, the average lifetime maximum
was $486,000—an increase of nearly $100,000 since 1983
and $150,000 since 1982.

Dental coverage. The dramatic increase in em-
ployer-provided dental care slackened in 1984, as the
incidence among professional-administrative workers
remained stable. Gains, however, continued for the
other two occupational groups. Over three-fourths of
the participants in health insurance plans received cov-
erage for dental expenses, compared with approximately
two-thirds in 1982 and one-half in 1979.

Nearly all dental plans covered a wide range of serv-
ices including examinations, X-rays, and restorative pro-
cedures such as fillings, periodontal care, and inlays.
Plans covering orthodontic expenses, at least for de-
pendent children, covered 72 percent of employees with
dental benefits in 1984,

Dental payments were most commonly based on a
percentage of the usual, customary, and reasonable
charge for a procedure. The percentage covered by a
plan generally depended on the type of procedure per-
formed. Lower cost procedures such as examinations
and X-rays were usually covered at 80 or 100 percent.
Fillings, surgery, and periodontal care were most likely
to be covered at 80 percent. More expensive proce-
dures—inlays, crowns, and orthodontia—were often

provided at 50 percent of the usual, customary, and
reasonable charge.

About one-fourth of the dental plan participants were
offered reimbursement based on a schedule of cash al-
lowances. In this type of arrangement, each procedure
is subject to a specified maximum dollar amount that
can be paid to the participant. Preventive procedures
were less likely to be subject to this type of schedule
than restorative procedures.

Two percent of dental plan participants had services
covered by an incentive schedule. Under this arrange-
ment, the percentage of dental expenses paid by the
plan increases each year if the participant is examined
regularly by a dentist.

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

Ninety-three percent of dental plan participants were
enrolled in plans that limited the amount of payment
each year by specifying a yearly maximum benefit.
Many plans have raised their limits in recent years—63



Table 60. Age and length of service requirements for
participation:' Percent of full-time participants in private
pension plans,’ medium and large firms, 1984

Table 61. Type of plan sponsor: Percent of full-time
participants in sickness and accident insurance, medium and
large firms, 1984

Profes- Protes-
sional | Techni- sional | Techni-
, i and | cal and | Produc- | and | cal and | Produc-
Age and service requirement All par- | adminis-| clerical |tion par- Plan sponsor te Bat, |adminis-| clerical |ffon par-
Provision ticipants |"trative | partici | ticipants pants "ative | partic- | ticipants
partici- | pants partici- | pants
pants pants
Minimum requirement Total . 00 | 100 | 100
Total 100 100 100 100 Single employer—union-negotiated
plan 3 10 1 41
With minimum age and/or service Single employer—nonunion 42 58 53 35
requirement .. 63 63 72 58 ‘Single employer—bargaining status
not known | 44 10 9 12
Service requirement only .. 22 20 22 24 ; ;
4-2 months 1 ) 0) 1 Multiemployer' 2 - 4 2
3 months 1 1 1 1
6 months 2 2 2 3 State disability board .. 12 22 22 7
1 year .. 16 15 15 7
2 years 1 1 1 1 Railroad retirement board 2 - 1 3
3 years 1 1 2 )
‘Over 3 years 1 1 2 1 * Individual employers in the same or in a related industry contributing a
negotiated amount to trust fund providing benefits for employees covered
Age 24 or less 4 2 4 5 under a collective bargaining agreement. The scope of the agreement
No service requires 17 0 ty) 2 may be at local, district council, or national level.
1-11 months of service ... 2 ul 3 1 2" Administrators of mandatory temporary disability insurance benefits in
1 year .. 2 1 2 New Jersey and New York. Required benefits can be provided through an
2 it fund,
26 39 6 29 ‘employer-sponsored plan as @ substitute for the State fund.
a 2 3 2 1 NOTE: Because of rounding, sums of individual items may not equal to-
1-6 months of service 1 1 1 1 Is. Dash indent cos in thi
tyear oa 26 3 8 tals. Dash indicates no employees in this category.
Without minimum age and/or
service requirement ..... 37 37 28 42
i Table 62. Type of plan sponsor: Percent of full-time
Maximum age requirement
ge requl Participants In long-term disability insurance, medium and
Total 100 100 100 100 Jarge firms, 1984
With maximum age limitation’ ... 61 67 cal 82 Profes-
sional | Techni-
Without maximum age limitation .. 39 33 29 48 ‘att par. |..2nd_ | cal and | Produc-
Plan sponsor nN Pat | adminis-| clerical | tion par-
ticipants. trative 7 ticipants
+ Excludes maximum 6-month administrative time lags allowed by rate | partici. | ticipants
ERISA, Most plans with time lags adopt the beginning of designated 6- Pe e Pants
month periods as participation dates. Pants
Excludes supplemental pension plans.
2 if a plan had alternate participation requirements, one of which was Total oo | 100 | 100 | +00
sevice ony, the sence only requiemtent was tabulated. Single employer-—union-negotited
‘ " i lan 15 3 6 37
5 ERISA legislation states that nearly all pension plans must allow pas- Pl
ticipation to fulltime employees who have reached age 25 and who have _Single employer—nonunion -| 78 89 88 at
y Single employer—bargaining status
completed one year of service. not ki in 9 8
© ERISA legislation permits plan administrators to impose a maximum rot know " 6 12
age for participation. Maximum age must be within 5 years of the plan's fe :
normal retirement date. Multiemployer’ .. is) 7) - 1

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

59

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

® Less than 0.5 percent.

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



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

1984
Profes-
sional | Techni-
Alt par |_ "4 _| cal and | Produc- |
Definition of terminal earnings | cjpants [adminis-| clerical | tion par-
trative | partici- | ticipants
partici- | pants
pants
Total . joo | 100 | 100 | 100 |
Three years "1 "1 ” 1 |
Last 3 1 1 2 ®
High 3 .. 1 2 1 ih)
Of last § ....... 1 1 1 @
Of last 10 ® Q ~
Ot career ® ro) io) 3)
High consecutive 3 9 9 8 10
Of fast 5 (o) a) (a) (3)
Of last 10... 7 7 7
Of career 2 1 1 3 i
Five years 86 87 87 85
Last 5 2 3 2 2
High 5 9 9 8 "
Of last 10. 6 7 4 7
Of last 15 .. 10) 9) i) 1)
Ot career 3 2 3
Other. ©} iy) 19)
High consecutive 5 .. 75 75 76 72
Of last 10 .. 58 59 57 57
Of last 15 .. 2 3 3 1
Ot career 14 13 16 4
Other . (oy ® y) 1
Other period .. 3 2 2 5

’ Excludes supplemental pension plans.
? Less than 0.5 percent.

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

45



Table 44. Private pension plans:' Percent of full-time participants by provision for integration of pension with Social

Security benefit, medium and large firms, 1984

Type of benefit formuta?

Provision Total’ lTerminall Career | Dotlar

earnings | earnings} arnount

Type of benefit formuta?

Provision Tota |rerminal] Career | Dollar

earnings | earnings | amount

All participants

Total

100 100 100

With integrated formula .. 56 84 83 1
Offset by Social Security

payment" ... 36 62 20 1

Based on service* 29 51 12 1

Not based on service’ 7 11 8 -

Dollar amount Y ) - -

Percent of payment 7 1 8 -

Pure excess’ .. 1 2 - -

Step-rate excess? .... 19 19 63 -

Integrated with a Social

Seourity breakpoint 10 13 20 -
Integrated with a specific
dollar breakpoint | 9 7 43 -
Without integrated formula ... 44 16 7 99

Professional and administrative

Total 100 100 100 | 100

With integrated formula 7 a9 72 9
Offset by Social Security
payment* 50 67 7 8
Based on service® 40 56 9 9
Not based on service 9 1" 8 -
Dollar amount .. 0) 0) - ~
Percent of payment . 9 i 8 -
Pure excess? .. 2 3 - -
Step-rate excess’ 26 20 54 -
Integrated with
‘Security breakpoint 15 13 2 -
Integrated with a specific
dollar breakpoint ..... 1" 7 33 -
Without integrated formula 23 u 28 9

Technical and clericat

Total nin 100 | 190 | 100 | 100
[With integrated formula ... 7 ot ad 2
Offset by Social Security
Payment . 53 7o | 92 2
Based on service 44 60 14 2
Not based on service 10 10 1B
Dollar amount 0) ¢) - :
Percent of payment 10 10 18 -
Pure excess? .. 1 2 - -
Step-rate excess® ... 22 19 53 -
Integrated with a Social
Security breakpoint 14 13 27 -
Integrated with a specific
dollar breakpoint 8 6 | 26 -
|Without integrated formula.... 23 9 16 98

Production
Total ....

|With integrated formula 34 70 94 )

Offset by Social Security
payment’ ..
Based on service’
Not based on service’

19 49 14 1)
4 3 | @ -

Dollar amount ra) 1 - -

Percent of payment 4] 12) 0 -

Pure excess’ .. 1 2 - -

Step-rate excess’ 14 19 80 -

Integrated with a Social

Security breakpoint . 6 12 14 -
Integrated with a specific

dollar breakpoint .. 9 6 66 -

Without integrated formula 66 30 6 | 100

' Excludes supplemental pension plans.

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

° if @ plan contained more than one benefit formula based on termi-
nal earnings, career earnings, or dollar amounts, the integrated formula
was tabulated. If neither of the formulas were integrated, a primary for-
mula was selected and tabulated,

* Benefit as calculated by formula is reduced by portion of primary
Sociat Security payment.

* Offset is equal to the product of a percent of primary Social Secu-
rity payments and the participant's years of service with the employer.

A maximum offset is frequently applied, for éxample, 50 percent.
° Benefit formula includes a reduction by a specified percent of pri-

a7

mary Social Security payments or a specific dollar amount. Although
generally offsets of up to 83.33 percent are permitted by the Internat
Revenue Service for plan qualification, offsets in excess of 50 percent
are uncommon. ,

” Less than 0.5 percent.

* Formula does not apply to earnings subject to FICA (Social Secu-
sity) taxes or below a specific dollar breakpoint.

* Formula applies lower benefit rate to earnings subject to FICA (So-
cial Security) taxes or below a specific dollar breakpoint.

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

|
i
|
|



among blue-collar workers (45 percent). The most com-
mon method of tying life insurance protection to earn-
ings was to multiply the employee’s annual earnings by
a factor of 1 or 2 and round the product to the next
$1,000. Two-fifths of all employees in multiple-of-earn-
ings plans had insurance equal to annual earnings.
Nearly as many, however, had coverage equal to twice
annual earnings. Professional-administrative partici-
pants had the highest coverage, with multiples of two
or more times their earnings commonly found. Multi-
ple-of-earnings formulas tended to be higher when em-
ployee contributions were required, typically providing
insurance at two or more times earnings."

There was no upper limit on life insurance for one-
half of participants in plans based on earnings. Where
limits existed, the proportion of employees with maxi-
mums under $100,000 has declined from one-half to
one-fifth and the percent with maximums over $250,000
has increased correspondingly since 1979, the first year
of the survey.

Most of the remaining life insurance plan participants
(one-third of the total) had a flat amount of insurance,
regardless of earnings. Fifty-three percent of all pro-
duction worker participants were covered by a uniform
amount, compared with 15 percent of white-collar
workers. While usually providing much smaller
amounts of insurance than earnings-based formulas, flat
amount coverage has improved. Participants in plans
providing benefits of less than $5,000 decreased from
27 percent in 1979 to 15 percent in 1984; most of the
offsetting increase was in amounts of $20,000 or more,
which, during the same period, grew from 2 to 11 per-
cent of workers insured by flat amounts.

If a participant became totally disabled, life insurance
in most plans was continued, either for life or until age
65. For a small number of plans, the amount of cover-
age was payable to the disabled employee in lump-sum
or installment form. To qualify under disability provi-
sions, the employee was usually required to be under a
specified age (commonly age 60) at the time of disability.

Three-fourths of all life insurance participants had
additional insurance coverage if accidental death or dis-
memberment occurred. The amount of insurance was
usually doubled in the case of accidental death.

In addition to basic coverage, some employers of-
fered their workers supplemental life insurance that was
at least partially employer financed. The typical sup-
plemental plan provided insurance in multiples of 1 to
3 times annual earnings. Only 4 percent of the employ-

“The employee contribution rate was commonly expressed as a
fixed rate for each $1,000 of insurance. Reported rates varied widely
from 3 cents to 67 cents per $1,000; three-fifths of the participants
with fixed rates paid less than 30 cents per $1,000. Data were not
available for almost one-third of contributory plan participants, how-
ever, because payroll deductions sometimes applied to an insurance
policy covering life insurance and one or more other benefit areas.

ees, ranging from 7 percent of professional-administra-
tive workers to less than 3 percent of production
workers, were participants in these plans.

Another kind of coverage sometimes available to the
workers is life insurance on their spouses and unmar-
ried dependent children. One-sixth of life insurance par-
ticipants had employer-financed dependent coverage in
1984; in most cases, the employer paid all of the cost.
Nearly all plans covered dependent children as well as
spouses. The most common coverage for death of ei-
ther a spouse or a child was a flat amount of $1,000.
Higher amounts, however, were available more often
for spouses than for children; spouse coverage of $2,000
or more applied to nearly one-half of the participants
with dependent life insurance, but similar coverage for
a child applied to only one-fifth of these workers. In-
stead of a flat amount, the coverage for a child fre-
quently increased at specified ages. For example, a child
could have no coverage until 14 days old, then $250
until 6 months, followed: by $500 up to a year, and
$1,000 after a year.

After retirement, basic life insurance continued until
death for 64 percent of all participants; the preretire-
ment amount of insurance, however, was reduced in
nearly all instances. Other forms of life insurance—ac-
cidental death and dismemberment, supplemental, and
dependent coverage—were seldom available after
retirement.

Retirement pension plans

(tables 39-55)

Eighty-two percent of the employees in the survey
were covered by private retirement pension plans, with
the employer usually paying the entire cost. The per-
cent of employee coverage was slightly lower for pro-
duction workers than for the other two groups.

Benefit formulas. Earnings-based formulas applied to
nearly seven-tenths of the employees covered by pen-
sion plans. These formulas pay a percent of the em-
ployee’s annual earnings per year of service, but may
differ in the calculation of annual earnings as well as in
the rate paid per year of service. For 21 percent of the
participants with earnings-based formulas, an average
of career earnings was used; for the remainder, pensions
were based on earnings in the final years of employ-
ment (terminal earnings formula). Terminal earnings
were defined as the average over a 5-year period for
86 percent of participants with terminal earnings for-
mulas. Such formulas usually designated the 5 consecu-
tive years with the highest earnings out of the last 10
before retirement.

A majority of participants with earnings-based for-
mulas——just over half with terminal earnings and almost
two-thirds with career earnings formulas—were in plans
that applied rates that varied according to service, earn-
ings, or age. Career earnings formulas, for example,