L . 2 . 1

/

* 0

> L -

SOUTHWEST MISSOURI STATE 

COLLEGE LIBRARY 

U. S. DEPOSITORY COPY

JUN 2 21964

BLS Bulletin 1394

Unfunded

Private

Pension

Pla ns

UNITED STATES DEPARTMENT OF LABOR

W. Willard Wirtz, Secretary

BUREAU OF LABOR STATISTICS

Ewan Clague, Commissioner

in cooperation with

UNITED STATES DEPARTMENT OF HEALTH,

EDUCATION, AND WELFARE

Anthony J. Celebrezze, Secretary

SOCIAL SECURITY ADMINISTRATION

Robert M. Bail, Commissioner

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
BUREAU OF LABOR STATISTICS REGIONAL OFFICES

SAN

FRANCISCO

___

Region V — Western

630 Sansome Street

San Francisco, Calif. 94111

Tel. : YUkon 6-3111

Region IV— North Central

105 West Adams Street

1365 Ontario Street

Cleveland, Ohio 44114

T e l.: 241-7900

Region III — Southern

1371 Peachtree Street, NE.

Atlanta, Ga. 30309

T e l.: TRinity 6-3311

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
BLS Bulletin 1394

Unfunded

Private

Pension

Plans

UNITED STATES DEPARTMENT OF LABOR

W. Willard Wirtz, Secretary

BUREAU OF LABOR STATISTICS

Ewan Clague, Commissioner

in cooperation with

UNITED STATES DEPARTMENT OF HEALTH,

EDUCATION, AND WELFARE

Anthony J. Celebrezze, Secretary

SOCIAL SECURITY ADMINISTRATION

Robert M. Ball, Commissioner

May 1964

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

Washington, D.C., 20402 - Price 30 cents

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
The principal features of unfunded private pension

plans, commonly referred to as "pay-as-you-go" plans,

are analyzed in this bulletin.

The plans* coverage ranged from 26 workers (the

minimum number required for reporting under the provisions of the Welfare and Pension Plans Disclosure Act) to

more than 90, 000 workers. In total, they covered approximately 1.4 million workers.

The study was conducted by the Bureau of Labor

Statistics at the request of, and with financial assistance

from, the Division of Research and Statistics of the Social

Security Administration, U.S. Department of Health, Education, and Welfare. The cooperation and assistance of

Joseph Krislov of the Social Security Administration, who

proposed this study, is gratefully acknowledged.

The Bureau of Labor Statistics, which takes responsibility for the contents of this bulletin, is also grateful for the cooperation rendered by the staff of the Office of

Labor-Management and Welfare-Pension Reports, the custodian of the Department of Labor's Disclosure Act files.

This study was conducted in the Bureau's Division of Industrial and Labor Relations by Joseph W.

Bloch, Chief of the Division, under the general direction

of L. R. Linsenmayer, Assistant Commissioner for Wages

and Industrial Relations. The bulletin was prepared by

Harry L. Levin. Walter W. Kolodrubetz planned the study

and supervised the analyses of the plans and the computation of the benefit amounts. Harry E. Davis and Stanley S.

Sacks assisted in the plan analyses. The entire project

was under the supervision of Donald M. Landay.

iii

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
C o n t e n t s

Page

Introduction----------------------------------------------------------------------------------------------------------- 1

Scope and method of study------------------------------------------------------------------------------ 2

Administration of plans______________________________________________________ 3

Appeals____________________________________________________________________ 5

Final decision on appeals--------------------------------------------------------------------------- 5

Amendment of the pension plan-------------------------------------------- 5

Reduction of benefits---------------------------------------------------------------------------------- 6

Suspension of benefits------------------------------------------------------------------------------- 7

Discontinuance of the pension plan------------------------------------------------------------ 7

Basic plans----------------------------------------------------------------------------------------------------------- 8

Normal retirement______________ 8

Benefit formulas__________________________________________________________ 8

Adjustment of private to Federal benefits----------------------------------------------- 10

Maximum and minimum benefits-------------------------------------------------------------- 11

Level of benefits__________________________________________________________ 12

Prenormal retirement and vesting----------------------------------------------------------------- 14

Early retirement______________________________________________________________ 15

Eligibility requirements__________________________________________________ 15

"Special" early retirement--------------------------------------------------------- 16

Disability retirement-------------------------------------------------------------------------------------- 16

Eligibility requirements---------------------------------------------------------------------------- 16

Benefit formulas---------------------------------------------------------------------------------------- 17

Level of benefits___________________________ -______________________________ 18

Vesting provisions------------------------------------------------------------------------------------------- 18

Eligibility requirements---------------------------------------------------------------------------- 19

Benefit formulas__________________________________________________________ 19

Death benefits_________________________________________________________________ 19

Survivor options______________________________________________________________ 20

Supplementary plans------------------------------------------------------------------------------ 21

Disability retirement------------------------------------------------------------------------------------ 21

Eligibility requirements--------------------------------------------------------------------------- 21

Benefit formulas---------------------------------------------------------------------------------------- 21

Level of benefits —-------------------------------------------------------------------------------------- 22

Death benefits_________________________________________________________________ 22

Additional benefit amount_____________________________________________________ 23

Tables:

1. Year of establishment of unfunded pension plans

by type of plan, spring 1962------------------------------------------------------------------ 24

2. Unfunded pension plans by number of workers

covered and type of plan, spring 1962_________________________________ 24

3. Benefits provided by unfunded pension plans by type

of plan, spring 1962 ------------------------------------------------------------------------------ 24

4. Amount of benefits paid in I960 by type of benefits

provided by unfunded pension plans, spring 1962--------------------------------- 25

5. Unfunded pension plans by industry and

type of plan, spring 1962_______________________________________________ 25

6. Minimum age and service requirements for normal retirement in unfunded basic pension plans, spring 1962___________________ 26

v

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
C o n t e n t s — C o n t in u e d

Page

T ab 1 e s— Co ntinu e d

7. Provision for integration of primary social security or

railroad retirement benefit with basic benefit by type

of basic benefit formula, spring 1962________________________________ 26

8. Percentage factors used in uniform percent formulas

and the reduction of plan benefits by either primary

social security or railroad retirement benefit, by

earnings computation utilized, spring 1962__________________________ 27

9. Basic monthly normal retirement benefit for each

year of credited service by maximum years of service

allowed, spring 1962__________________________________________________ 28

10. Minimum benefit provisions by type of basic benefit

formula in unfunded pension plans, spring 1962_____________________ 28

11. Provision for deduction of primary social security benefit

from minimum benefit by type of minimum benefit formula

in unfunded basic pension plans, spring 1962________________________ 28

12. Normal retirement benefits payable by basic unfunded

pension plans to workers earning $4, 800 per year

for 30 years of future service, spring 1962_________________________ 29

13. Normal retirement benefits including primary social

security or railroad retirement benefit, payable by

unfunded basic pension plans to workers earning $4, 800

per year for 30 years of future service, spring 1962_______________ 29

14. Provisions for early and disability retirement and vesting

in unfunded basic pension plans by industry, spring 1962___________ 30

15. Minimum age and service requirements for early retirement in unfunded basic pension plans, spring 1962_____________ 30

16. Minimum age and service requirements for disability

retirement in unfunded basic pension plans, spring 1962___________ 31

17. Disability retirement benefits payable by unfunded pension

plans to workers retiring at age 50 and earning $4, 800 per

year for 20 years of future service by type of plan,

spring 1962____________________________________________________________ 31

18. Disability retirement benefits, including social security

or railroad retirement disability benefit, payable to

workers retiring at age 50 and earning $4,800 per

year for 20 years of future service under unfunded

pension plans, by type of plan, spring 1962__________________________ 32

19. Minimum age and service requirements for vesting

in unfunded basic pension plans, spring 1962________________________ 32

20. Type of death benefit provided by unfunded basic

pension plans, by industry, spring 1962_____________________________ 33

21. Types of benefit provisions in unfunded supplementary

pension plans by industry, spring 1962_______________________________ 33

22. Minimum age and service requirements for disability

retirement in unfunded supplementary pension

plans, spring 1962_____________________________________________________ 34

vi

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Unfunded Private Pension Plans

Introduction

Most unfunded private pension plans were established after World War II,

when the pension movement as a whole grew rapidly (table 1). By the end of I960,

23 million workers (active and retired) belonged to private pension and deferred

profit-sharing plans. They included 1. 4 million workers covered by the 851 unfunded pension plans that filed financial reports for I960 under the Welfare and

Pension Plans Disclosure Act (table 2). 1 However, less than half a million of these

workers were covered by the 677 unfunded basic plans providing old-age pensions.

The other 900,000 workers belonged to unfunded supplementary plans that provided

long-term disability, death, or other benefits (table 3); virtually all members

of such plans also belonged to funded plans providing old-age pensions.

The aggregate amount of benefits paid in I960 by all 677 basic plans was

$51 million (table 4) or 3 percent of the total benefit payments made by all retirement plans, funded or unfunded. An additional $64 million was paid by

174 supplementary plans.

The types and amounts of benefits provided by basic unfunded plans were

generally similar to those provided by funded plans. Direct comparisons are

difficult because of the greater concentration of unfunded plans in certain industries, the absence of employee contributions to unfunded plans, the absence of

multiemployer plans, etc. Nonetheless, the differences are, on the whole, not

significantly large, with one important, but expected, exception. The prevalence

of vesting 1 2 in unfunded plans is so much lower than in funded plans that it must

be attributed chiefly to the difference in financing.

The essential difference between funded and unfunded plans lies in the

method of paying for benefits. The benefits of unfunded plans are paid, like wages,

directly from an employer’s general assets, often as a payroll item. On the other

hand, the benefits of funded plans are paid from special funds which are administered by trustees or insurance companies, and are irretrievably segregated from

the general assets of the firm. Funded plans afford the worker greater intrinsic

assurance that benefits will be paid when due because once they are fully funded,

payment does not depend entirely, as it does in an unfunded plan, upon the employer’s willingness and ability to fulfill the terms of the plan. 3

From the employer's viewpoint, too, funded basic plans have some advantages. Employers may currently reduce their Federal income taxes by obtaining tax credits as they make contributions, instead of waiting until the pensions

are paid. Furthermore, the earnings of the pension trust fund, which reduce future

contributions, are exempt from income taxes.

1 The data for unfunded plans exclude small plans not required to report (i. e ., those covering fewer than

26 workers and those sponsored by nonprofit organizations). On the other hand, the data for all plans, as estimated

by the Social Security Administration, include estimates for all retirement plans, including nonprofit plans, those not

reporting under the act, and those financed through profit sharing.

2 A vesting provision guarantees the worker who has met specific requirements, a right or equity in his accrued

pension based on all or part of the employer's contributions should his employment be terminated before he becomes

eligible for regular retirement benefits. For additional information on vesting provisions see Pension Plans Under

Collective Bargaining, Late 1958 (BLS Bulletin 1259, 1959).

3 It should be noted that the benefits for past service promised by many funded plans may not be fully funded;

however, insofar as they are funded, they are presumably more secure than they would be under an unfunded plan.

1

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
2

Owners actively engaged in operating a business, and high paid employees

whom the owners wish to attract and retain, may also prefer a funded plan because

of its tax advantages to them and their families. They may, for example, reduce

their personal income taxes by electing to take a lump-sum payment instead of

an annuity, to obtain the favorable capital gains treatment granted such payments only if made by a funded plan. Moreover, they and their heirs are relieved

of gift and estate taxes for which they might be liable under an unfunded plan.

In addition, the first $5,000 of death benefits are excluded from the taxable income

of the beneficiaries.

The chief disadvantage of a funded basic pension plan is that contributions

to a separate fund divert assets (chiefly cash) from the business. Where the

earnings of the tax-free pension trust fund are substantially lower than the earnings of the business after payment of taxes (or the net cost, after taxes, of borrowing the funds needed to replace the contributions), this disadvantage may be great.

Another drawback, in the eyes of some employers, is that a funded plan must meet

the nondiscrimination test and other requirements of the Internal Revenue Service.

The relative advantages and disadvantages to employers of funding supplementary pension plans are not as great as those of funding a basic plan because

supplementary plans cost far less. Moreover, some companies consider it best

to treat certain benefits, such as those payable for deaths prior to retirement,

as current expense items rather than as deferred charges. Furthermore, because

some benefits are payable only temporarily, the advantages of funding are short

lived; the possibility of certain other benefits becoming payable is so unpredictable

that such benefits are difficult to fund appropriately.

Scope and Method of Study

Basic plans, as the term is used in this study, provide old-age retirement benefits (ordinarily payable at age 65) and usually also provide other benefits, such as early and disability retirement, and death benefits (table 3). The

remaining plans are termed supplementary plans because they provide retirement

and death benefits that supplement the old-age retirement benefits provided in virtually all instances by funded pension plans.

The study is based on a stratified random sample of the reports to the

U.S. Department of Labor required under the provisions of the Welfare and Pension Plans Disclosure Act. The sample accounted for 30 percent of the reports

and over 92 percent of the workers under the unfunded plans reporting to the

Department of Labor. It was selected from plans filing a 1959 financial report

(Form D-2). Coverage and financial data were adjusted to reflect the I960 financial reports, and data on benefits were obtained from the plan descriptions

(Form D -l) on file in the spring of 1962.

All plans covering 1, 000 workers or more were included in the study.

Plans covering 26 to 1, 000 workers were stratified by both industry division and

size (number of workers) so that data could be presented for industry divisions

(1-digit SIC codes) and for some major industry groups (2-digit SIC codes) in

manufacturing. These designations were based on the 1957 edition of the Standard

Industrial Classification Manual prepared by the Bureau of the Budget.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
3

Data for each sample report were weighted in accordance with the probability of selection of that report. For example, where 1 report out of 10 was

selected in an industry division-size class, it was considered as representing

itself as well as 9 other plans; i. e. , it was given a weight of 10.

No attempt was made to adjust the totals so derived to the total number

of plans or the financial data previously reported by the Department’ s Office

of Welfare and Pension Plans (OWPP) 4 for all unfunded retirement plans on file,

because the latter were found to include some plans outside the scope of the study.

OWPP data included, for example, some reports from plans with less than 26 participants, which are outside the reporting requirements of the disclosure act, reports from plans with separately maintained pension funds (funded plans), and

plans not providing retirement benefits or benefits designed to supplement retirement benefits.

Administration of Plans

Less than half the plans were under collective bargaining but, because

they included most of the larger plans, they covered a large majority of the

workers; 7 out of 10 workers covered by unfunded plans belonged to plans that

were collectively bargained as compared to 6 out of 10 workers under funded

plans. 5 This was largely because over half the workers in unfunded bargained

plans were covered by several large supplementary plans in the highly organized

telephone industry.

Bargaining status

A ll plans-----------------------------------------------------

Plans under collective bargaining-------—

Plans not under collective bargaining-------

1 See footnote 1, table 1.

NOTE:

Basic plan_____ Supplementary plan

Plans

Workers 1 

(thousands) Plans

Workers 1

(thousands)

677 462 174 904

310 192 81 751

367 270 93 153

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

All but a tenth of the 200, 000 workers covered by basic plans under

collective bargaining were represented by national or international unions. 6 The

rest were represented by single-firm independent unions and, in a few cases,

by local unions directly affiliated with the AFL-CIO. Only four unions represented

over 10, 000 workers— the Steelworkers, Mine Workers District 50, Electrical

Workers (IBEW), and Teamsters— and none covered over 20,000. The Communications Workers, which represents most workers in the telephone industry,

represented more workers belonging to supplementary plans than any other union.

4 Merged in September 1963 into the Office of Labor-Management and Welfare-Pension Reports under the

Labor-Management Services Administration.

5 Based on data compiled for Health and Insurance, and Pension Plan Coverage in Union Contracts, Late 1960

(BLS Report 228, 1962), p. 2.

6 The number of workers represented by unions is somewhat overstated because many plans negotiated by unions

also cover workers outside the bargaining units represented by the unions.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
4

The national and international unions participating in unfunded basic pension plans

in the spring of 1962 are shown in the following tabulation: 7

1 0 . 0 0 0 and under 2 0 ,0 0 0 workers

Electrical (IBEW)

Mine District 50 (UMW) (Ind. )

Steelworkers (USA)

Teamsters (TCWH) (Ind.)

5.000 and under 10,000 workers

Cement (CLGW)

Communi cations (CWA)

Electrical (IUE)

Longshoremen (ILA)

Machinists (IAM)

5 , 0 0 0 and under 10, 0 0 0 workers— Continued

Newspaper Guild (ANG)

Packinghouse (UPWA)

Papermakers (UPP)

Printing Pressmen (IPPA)

2,500 and under 5,000 workers

Retail Clerks (RCIA)

Rubber (URW)

Street (SERMCE)

Textile (TWUA)

Textile (UTWA)

Three-fifths of the plans were in manufacturing industries (table 5), particularly chemicals, textiles, and other nondurable goods industries. Among nonmanufacturing industries, worker coverage was concentrated in the telephone and

railroad industries.

Virtually all plans were administered by (i. e. , ultimate financial responsibility resided in) the employer or an employer-appointed board. 8 However,

as shown in the tabulation below, 50 plans, with about 28, 000 workers, had a

joint union-management committee to handle appeals. Another 20 plans covering

15, 000 workers had a joint board that was responsible for only a segment of the

administration of the plan. Only one plan was jointly administered by an employer

and a union.

Type of administrator

All plans------------------------------------------------------------------

Employer or employer-appointed b oard----------------

Without supplementary joint board or

committee ------------------------------------------------------

With joint appeals committee appointed

by em ployer----------------------------------------------------

With joint board having limited administrative

responsibility appointed by em ployer------------

Joint board (union and employer appointed)----------

________Type of plan

Total Basic

Plans

Workers 1 

(thousands)

851 1,367

850 1,365

780 1, 322

50 28

20 15

1 2

Plans

Workers *

(thousands)

677 462

676 461

608 420

49 27

19 14

1 2

Supplementary

Plans

Workers 1 

(thousands)

174 904

174 904

172 902

1 1

1 1

^ See footnote 1, table 1.

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

7 All unions are affiliated with the AFL—CIO except those followed by (Ind. ). Excluded from this list are

unions representing fewer than 2, 500 workers under unfunded pension plans, single firm independent unions, and Federal

labor and industrial unions directly affiliated with the AFL—CIO.

8 Plans were directed to identify their administrator according to the following definition in the Welfare and

Pension Plans Disclosure Act: "(1) The person or persons designated by the terms of the plan or the collective bargaining agreement with responsibility for the ultimate control, disposition, or management of the money received

or contributed; or (2 ) in the absence of such designation, the person or persons actually responsible for the control,

disposition, or management of the money received or contributed irrespective of whether such control, disposition,

or management is exercised directly or through an agent or trustee designated by such person or persons. M

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
5

Appeals. All plans made provision for appeal when a claim for benefits

was denied. Three-fourths of the plans required that appeals be made to the

employer or his designated representative. Nearly all the remaining plans provided a joint union-management board to rule on appeals.

Party to receive initial

appeal for benefits Plans

All plans----------- 851

Employer----------------------------------------------------------------- 648

Joint union-management board---------------------------- 187

Specific cases appealed to impartial umpire

or arbitrator--------------------------------------------------------- 14

Tripartite appeals board--------------------------------------- 1

Joint uni on-management board for minimums;

employer for disability--------------------- 1

* See footnote 1, table 1.

NOTE: Because of rounding, sums of individual i

Type of plan

Total Basic Supplementary

Workers * Workers1 Workers *

(thousands) Plans (thousands) Plans (thousands)

1,367 677 462 174 904

1,135 491 361 157 774

145 173 81 14 63

71 12 5 2 66

15 1 15 - -

1 _ _ 1 1

may not equal totals.

Final Decision on Appeals. The final decision regarding any claim for

benefits was made by the employer in nearly all the plans where appeals were

initially made to the employer or a board designated by him. However, most

of the plans with joint appeal boards provided for the appointment of an impartial

umpire or arbitrator if the union and management members were deadlocked.

This procedure was used by one-fifth of the plans.

Type of plan

Total Basic Supplementary

Workers1 Workers 1 Workers *

Final determination of appeal Plans (thousands) Plans (thousands) Plans (thousands)

All plans----------------------------------------------------------------- - 851 1,367 677 462 174 904

Employer----------------------------------------------------------------- - 632 1,091 476 352 156 739

Joint union-management board only (without

provision for resolving disagreements)----------------- 52 32 47 29 5 4

If union and employer cannot agree, impartial

umpire or arbitrator decides---------------------------------- 166 228 153 6 6 2 13 161

Tripartite appeals board---------------------------------------- 1 15 1 15 - -

1 See footnote 1, table 1.

2 Includes 1 plan, covering 35,000 nonunion workers, who may appeal to an impartial medical board and

1 plan in which appeals relating to disability benefits are decided by the employer.

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

Amendment of the Pension Plan. In 2 out of 3 plans, covering 2 out

of 5 workers, the employer explicitly reserved the right to amend the plan at his

sole discretion. A somewhat larger number of workers were covered by plans

that required union consent before the worker's benefits or privileges could be

diminished. In addition, in a tenth of the plans the employer also had the right

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
6

to amend the plan but agreed to make no change during the period of the collective bargaining agreement. A fifth of the plans could only be amended by collective bargaining.

____________ Type of plan___________

Total_______ ______Basic Supplementary

Workers 1 Workers 1 Workers1

Authorization to amend plan Plans (thousands) Plans (thousands) Plans (thousands)

All plans---------------------------------------------------------------------------- 851 1,367 677 462 174 904

At company's discretion-------------------- ------------------------------

At company's discretion, but no change during period

563 574 445 319 118 255

of collective bargaining agreement------------------------------ 103 662 78 53 2 25 609

By collective bargaining on ly----------------------------------------- 175 124 144 84 3 31 40

Information not available------------------------------------------------- 1 0 7 1 0 7 - -

1 See footnote 1, table 1.

2 Includes 18 plans, covering 520,000 workers, that required union consent before benefits or privileges

could be diminished.

3 Includes 1 plan, covering 1,000 workers, in which only the minimum benefit cannot be reduced other

than by collective bargaining; disability benefits may be amended at company's discretion.

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

Reduction of Benefits. In more than half of the plans, affecting two-fifths

of the workers, the company reserved the right to reduce the amounts of plan

benefits. Almost all remaining plans prohibited a reduction or restricted its

timing. Although the majority of these plans prohibited a reduction of benefits

during the period of the collective bargaining agreement and another two-fifths of

these plans prohibited a reduction at any time, almost two-fifths of the workers

belonged to plans that were restrained from reducing benefits without the union*s

consent.

Limitations on reduction of benefits

All plans--------------------------------------------------------------------------

None—may be reduced at company's discretion----------

Benefits for workers already retired cannot be reduced

by terms of collective bargaining agreement------------

Benefits cannot be reduced (not under collective

bargaining)---------------------------------------------------------------------

Benefits cannot be reduced unless union agrees------------

Benefits cannot be reduced during period of collective

bargaining agreement---------------------------------------------------

Benefits cannot be reduced prior to a specific date-----

Information not available-----------------------------------------------

Type of plan

Total Basic Supplementary

Plans

Workers 1 

(thousands)

Workers1 

Plans (thousands) Plans

Workers 1 

(thousands)

851 1,367 677 462 174 904

477 533 3 77 297 1 0 0 235

53 27 38 21 15 6

75 89 58 21 17 67

19 529 1 9 18 520

2 1 0 169 188 104 2 22 65

6 1 0 5 3 1 7

11 9 10 7 1 3

1 See footnote 1, table 1.

2 Includes 1 plan, covering 1,000 workers, in which only minimum benefits cannot be reduced at the

company's discretion during the life of the agreement.

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

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
7

Suspension of Benefits. Most unfunded plans, like most single employer

funded plans, place no restriction on a pensioner^ employment. However, about

a fourth of the plans reserved the right to suspend benefits, usually for specified reasons, such as engaging in employment prejudicial to the company*s interest. An eighth of the supplementary plans provided for suspension of benefits.

Type of plan

Total Basic S uppl e m e nt ary

Conditions for suspension of Workers * Workers 1 Workers 1

individual's benefits Plans (thousands) Plans (thousands) Plans (thousands)

All plans--------------------------------------------------------------- 851 1,367 677 462 174 904

Not provided--------------------------------------------------------- 641 1,089 489 192 152 897

At company's discretion-------------------------------------- 38 23 28 20 10 3

Employment prejudicial to company interest----- 89 177 83 174 6 3

Employed by competitor-------------------------------------- 68 75 62 73 6 1

Any employment------------------------------------------------- 10

(2 ) 10 (2 ) - -

Information not available------------------------------------ 5 3 5 3 - -

See footnote 1, table 1.

2 Fewer than 500 workers.

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

Discontinuance of the Pension Plan. Most unfunded plans,, like most

funded plans, could be discontinued at the discretion of the company. 9 Two-thirds

of the unfunded plans covering four-fifths of the workers had such a provision.

Virtually all of the remaining plans prohibited discontinuance during the term

of a collective bargaining agreement. These plans comprised more than two-thirds

of the plans under agreements, but covered less than 30 percent of the workers.

Limitations on discontinuance of plan Plans

All plans--------------------------------------------------------------- 851

At company's discretion-------------------------------------- 571

Plan cannot be discontinued during term of

collective bargaining agreement---------------------- 270

Information not available------------------------------------ 10

Total

Type of plan

Basic Supplementary

Workers 1 Workers * Workers *

(thousands) Plans (thousands) Plans (thousands)

1,367 677 462 174 904

1,093 436 321 135 772

267 231 135 239 132

7 10 7 _ _

* See footnote 1, table 1.

2

Includes 1 plan covering 1,000 workers in which only minimum benefits cannot be discontinued at

the company's discretion during the life of the agreement.

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

9 To meet the requirements of the Internal Revenue Code, all funded plans provide that at termination, accrued

benefits are vested by plan members; only if the assets in the fund exceed the members' vested benefits can the employer recover any of his contributions. When an unfunded plan is terminated, however, the employer "recovers" the

cost of all pensions not yet paid, including, if he wishes, those of workers previously retired.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
8

Basic Plans

Four out of five basic plans reporting their date of establishment commenced operating in the period 1945—59. (See table 1.) However, due to the

establishment of a few large plans during the early 1900* s, about a fifth of the

workers belonged to plans that had been in operation for more than half a century.

Basic plans generally covered fewer workers than supplementary plans.

Seven basic plans, covering 10,000 or more workers each, accounted for 180,000

workers. An additional 67 plans covered between 1,000 and 10,000 workers each.

In contrast, about three-fourths of the plans covered fewer than 300 workers each.

About three-fifths of the workers under basic plans were employed in

nonmanufacturing industries, chiefly in railroad transportation (144,000) and trade

(52,000) (table 5). Among manufacturing industries, two-thirds of the plans were

in nondurable goods industries. About half of the coverage among durable goods

industries was in primary metals (41,000).

Normal Retirement

In over 6 out of 7 basic plans, covering 9 out of 10 workers, the normal

retirement age 10 was the same as in nearly all private funded plans and in the

Social Security Act, i. e. , age 65 (table 6). Most plans also required the fulfillment of 10 years or more of service with the employer. * 11 Three out of five workers belonged to plans requiring 15 or 20 years of service. Only 1 out of 7 plans

covering about 10 percent of the workers had no service requirement or required

less than 10 years of service.

Forty-nine plans provided a lower retirement age for women than for

men. Most of these plans, as shown by the following tabulation, allowed women

to retire on full benefits at 60.

Normal retirement age

Men Women Plans

Workers

(thousands)

All plans with earlier normal

age for women 1 --------------------

retirement

49 103

70 61 ------------------- 1 7

6 8 6 5 ------------------- 5 (2 )

65 6 0 ------------------- 37 78

65 5 5 ------------------- 5 16

60 5 5 ------------------- 1 1

1 See footnote 1, table 8 .

2

Fewer than 500 workers.

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

Benefit Formulas. Three-fifths of the plans had only one formula for

determining normal retirement benefits. The other plans, covering two-fifths

of the workers, had two formulas; (1) A basic formula, by which benefits are

The normal retirement age is usually defined as the earliest age at which a worker, having otherwise qualified, may retire at his own volition and receive immediately the full amount of benefits to which he is entitled.

11 The term "service" as used in this bulletin refers to the years of employment credited toward qualification

for benefits or used in computing benefits, regardless of the definition of service in the plan. In the plan documents,

it may be referred to as "continuous service, " "credited service, " "consecutive years of service, " and, unlike our

definition, may exclude service before the worker was eligible to belong to the plan. Only 38 plans, covering 65,000

workers, specified a minimum age or service requirement for participation.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
9

usually computed, and (2) an alternate or minimum formula, guaranteeing certain

benefits for specified service and/or earnings, used for workers with long service, low earnings, or both. Nine out of 10 plans (349) without minimum formulas,

moreover, implicitly established a guaranteed base in their basic formulas by

specifying minimum service requirements for eligibility for normal retirement

benefits. For example, a plan requiring 10' years of service that provides a

benefit of 1 percent of average monthly earnings for each year of service, has

an implicit minimum benefit of 10 percent of average monthly earnings.

The basic benefits payable by 3 out of 10 plans were based solely on

service, by 1 out of 15 solely on earnings, and 1 out of 2 on both service and

earnings, as shown by the following tabulation: 12

Type of basic benefit formula

All plans providing for normal retirement

Benefits vary by earnings and service----------

Benefits vary by service alone----------------------

Uniform benefit for specified service----------

Benefits vary by earnings alone--------------------

Other--------------------------------------------------------------

Information not available----------------------------

Plans

Workers *

(thousands)

677 462

346 349

2 0 0 84

61 9

46 7

14 13

10 1

* See footnote 1, table 1.

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

The majority of the plans in which benefits varied by earnings and service or by earnings alone considered earnings for all the years in which the worker

belonged to the plan (i. e. , career, average, or total earnings). However, more

than a fourth of the plans based their benefits on earnings in selected years—

usually on average earnings in the last 5 or 10 years.

Earnings base

All plans in which benefits vary by earnings

and service, or earnings alone1 ---------------------

Plans using earnings in all years-----------------------

Each year’s earnings------------------------------------

Total earnings----------------------------------------------

Average earnings------------------------------------------

Plans using earnings in selected years-------------

Last 10 years' earnings--------------------------------

High 10 consecutive years' earnings-----------

High 5 of last 10 years' earnings-----------------

Last 5 years' earnings----------------------------------

High 5 consecutive years’ earnings-------------

Other-------------------------------------------------------------------

Plans

Workers

(thousands)

392 356

268 2 1 2

2 233 207

5 (3)

30 5

109 141

4 53 100

1 1

9 23

44 12

b 2 4

5 15 3

* See footnote 1, table 8 .

^ Includes some plans, covering fewer than 500 workers, that computed

benefits on the last year's earnings.

3 Fewer than 500 workers.

4 Includes plans, covering about 1,000 workers, that computed benefits

on the last 15 years' earnings.

5 Includes plans, covering about 3,000 workers, that provided a lumpsum benefit based on earnings and service and other plans, covering fewer than

500 workers, that provided benefits at the discretion of the board of directors.

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

12 The term "earnings" as used in this bulletin refers to that part of the cash income, derived from employment with a company, that is used in computing the worker's pension benefit. Such earnings may be termed "total

earnings," "career earnings," "terminal earnings, " "credited earnings," "average earnings," etc., and may exclude

certain earnings, such as the first $4, 800 earned each year, or overtime and other premium pay.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
10

Under another type of formula, a uniform amount was provided all qualified pensioners regardless of the amount of service or earnings. The attainment

of age 65 and from 10 to 25 years of service were sufficient to qualify for this

uniform benefit. Although 61 plans made such a benefit available, they covered

only a small number of workers. The benefit amounts varied considerably from

plan to plan; ranging from $40 to $ 300 a month.

Adjustment of Private to Federal Benefits. While the old-age benefits

provided under the Social Security and the Railroad Retirement Acts are considered in fixing private plan benefits, they were directly incorporated into the

basic normal retirement benefit formulas of about 2 out of 5 unfunded basic plans

which covered almost 2 out of 3 workers.

Private plan benefit formulas are "integrated" with the public programs

in three ways:

1. Under the offset method, all or part of the Federal benefits payable

to the worker are "offset" against (i. e. , deducted from) the amount calculated from the benefit formula under the private plan. This reduction usually

applies only to the Federal benefit for the worker himself, i. e. , the benefits

stemming from his marital status (wife* s benefits) are excluded.

2. Under the step rate method, a larger percentage factor is applied to

earnings in excess of a specified amount (almost always the maximum earnings

considered in computing social security or railroad retirement benefits at the

time the formula was adopted or amended)13 than to those below that amount.

3. Under the excess earnings method, only earnings in excess of a

specified amount (usually also the maximum considered in computing the

Federal benefits) are used to compute private benefits. This third method,

where zero percent is applied to earnings below a certain amount, is of

course, a variant of the second.

The prevalence of the three integration methods among basic plans was

as follows:

Integration provision Plans,

Workers 1 

(thousands)

All basic p la n s------------------------------------------— 462

No integration provision------------------------------

--------- 2 401 168

Integrated p la n s----------------------------------------— 294

Offset m ethod---------------------------------------- 194

Step rate method-------------------------------------- 50

Excess earnings method — ----------------------

--------- 12 50

1 See footnote 1, table 1.

2 Includes 10 plans, covering 1,000 workers, for which no information

was available.

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

totals.

13 The maximum ceiling placed on earnings has been raised from $3,000 in 1935 to $3, 600 in 1951, to $4, 200

in 1955, and to $4,800 in 1959; cf. Social Security Act, sec. 215 (e) (1). Creditable railroad earnings under the

Railroad Retirement Act were raised from $3,600 to $4, 200 in 1954, to $4, 800 in 1959, and to $5,400 in 1963.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
11

The prevalence of integration provisions depended largely on the factors

used to determine benefits. Plans not basing their basic benefits on earnings

were rarely explicitly integrated with the Government programs. On the other

hand, most plans with formulas based on earnings integrated their benefits

either by making deductions or by using 2 percentage factors (table 7). Overall, about 3 out of 10 plans, covering 2 out of 5 workers, had offset provisions,

most commonly deducting the entire primary social security and railroad retirement benefits.

About two-thirds of the workers belonging to integrated plans were in

plans that used the offset method. The largest group of these plans deducted

one-half the primary social security benefit. A slightly smaller number of plans

covering more than twice as many workers deducted the entire social security

benefits, presumably on the theory that since the employer pays only half of

social security taxes, he can claim credit for only half the benefits. Other

plans followed the steel industry practice of deducting $85 a month (the maximum primary benefit when the steel industry plans were established) or $80 a

month, so that all subsequent increases in social security benefits would go

to the pensioners. 14

In contrast to the offset method, which was used by plans of all except the flat benefit type, the percentage factors and excluded earnings methods

of integration were limited to plans basing benefits on both service and earnings.

Two plans which covered two-thirds of the workers belonging to plans using the

first method provided, for each year of service, a benefit of 0. 75 percent of

the first $250 of monthly earnings and 1.5 percent of the balance. For workers

earning over $ 375 monthly, these factors determine higher benefits than 1 percent of all earnings for each year of service— the factor most commonly used by

plans with a single factor and no deductions (table 8).

The benefits of most workers in plans using the excluded earnings

method, which was found only in the railroad industry, were based on monthly

earnings in excess of $ 350— the maximum considered under the Railroad Retirement Act when the provision was adopted or revised by the plans.

One percent was the most prevalent factor in plans that used a single

percentage factor to compute benefit amounts. Among plans of this type, whose

basic benefits varied by earnings, more than half integrated such benefits with

primary social security or railroad retirement benefits. Of these, plans covering over half the workers reduced their benefits by all primary Federal benefits.

Eighty-five percent of the plans that based their basic benefits solely on

service did not offset Federal benefits. They ranged from $1 a month to over

$4 a month for each year of service— most frequently $2 a month (table 9).

Maximum and Minimum Benefits. A maximum benefit was specified in

about half of all basic benefit formulas. Three-eighths of these plans established a uniform monthly benefit amount that could not be exceeded regardless

of earnings or length of service. They included 61 plans providing a uniform

benefit for all workers with at least a specified amount of service. Another

three-eighths of the plans covering half as many workers established a maximum benefit by not crediting service in excess of a specified amount— usually

30 to 35 years. In addition, a few large plans set maximum benefits varying

by years of service.

In order to increase pensions by $5 a month, effective Jan. 1, 1960, funded plans in the steel industry

reduced from $85 to $80 the amount deducted for primary social security benefits from plan benefits computed by

the basic benefit formula.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
12

Maximum benefit provision Plans

Workers *

(thousands)

All plans providing normal retirement benefits----- 677 462

Without maximum benefit-------------------------------------- 287 251

With maximum benefit------------------------------------------- 380 211

Uniform maximum regardless of service

or earnings------ --------------------------------------------------- 139 87

Limits on length of service credited------------------ 138 42

Uniform percent of earnings regardless

of service--------------------------------------------------------- 66 16

Maximum graduated by length of service--------- 18 58

Other-------------------------------------------------------------------- 19 9

Information not available-------------- ---------------------- 1 0 1

1 See footnote 1, table 1.

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

A minimum benefit determined by a formula different than that used to

compute the basic benefit was provided by two-fifths of the unfunded plans covering two-fifths of the workers. Most minimum benefit provisions were one of

two types: (l) A uniform benefit for each year of service, and (Z) a uniform

benefit for workers with a specified amount of service. The first type was provided by over half the plans with minimums and covered three-fifths of the

workers (table 10).

Minimum benefit formulas, unlike basic formulas, were seldom integrated with Federal benefits. Social security benefits, for example, were deducted from the minimum benefit amount by only Z5 plans. Twenty subtracted

all the primary social security benefit and five subtracted half of such benefit

(table 11).

Level of Benefits. To ascertain the level of normal retirement benefits relative to previous earnings and service, hypothetical benefits payable by

each plan were computed under the following assumptions: 15

1. Retirement at age 65.

Z. Thirty years of credited service.

3. Annual earnings of $4,800. (Since this earnings level was assumed

to be constant throughout the worker1 s career, an important difference between plans basing benefits on career earnings and those using terminal earnings was not taken into account. )

4. Maximum primary social security benefit of $ 1Z7 a month, or,

where applicable, the maximum railroad retirement benefit, for 30 years'

service, of $ Z51 a month.

15 The computations were based on the formula for current service. However, the amounts currently payable

to eligible workers are often less because they are based, at least in part, on benefit formulas for past service. See

Normal Retirement, Early and Disability Retirement, Fall 1959 (BLS Bulletin 1284, 1960), p. 5. The Federal

benefits were those in effect in 1962, when the information on private plan benefits was obtained.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
13

No benefits were payable under the foregoing assumptions by 48 plans

covering 71,000 railroad workers and 7,000 others— about 1 out of 6 workers

belonging to the 618 plans for which plan benefits could be calculated (table 12).

These plans include 23 out of 28 railroad plans covering almost half the workers belonging to plans in that industry. 16 These plans were obviously designed

to pay benefits only to workers with higher earnings or longer service than those

of the hypothetical pensioner who is expected to receive $251 a month under the

Railroad Retirement Act. They also included plans in other industries where

workers typically earn less than $4,800 a year. Plans with offset formulas may

pay significant benefits to workers with low earnings even though they do not pay

any benefits to higher paid workers receiving maximum social security benefits.

Nearly three-fourths of the private plans outside the railroad industry

provided, under the assumed conditions, benefits that ranged between $50 and

$150 a month and averaged about $89 a month. 17 Because plans covering half

the workers belonging to plans in the railroad industry, as previously noted, pay

no benefit under the assumed conditions and because the rest pay only small

benefits averaging less than $ 20 a month, the average railroad plan benefit was

$ 10 a month.

When all plans are considered, benefit amounts (exclusive of primary social security or railroad retirement benefits) ranged upwards to more

than $250 a month (table 12). The average plan benefit amount was $64.40 a

month or about one-sixth the worker* s previous average gross monthly earnings. Plans with only 1 percent of the workers paid at least 50 percent of

preretirement earnings.

The total pension benefits (private plus public benefits) of retired railroad workers were usually greater than that of pensioners from other industries

because private plan benefits rarely cover the difference between social security

and railroad retirement benefits. Only about 1 out of 5 nonrailroad workers

belong to unfunded plans that provide as large a benefit, including $ 127 for

maximum primary social security benefits, as railroad workers receive from

the Government plan alone (i. e. , $251 a month). As a result, the average combined benefits were nearly two-thirds of preretirement earnings for railroad men

and somewhat more than half for other pensioners.

Under these assumptions, total monthly retirement income (private plan

benefit plus Federal benefits) payable to the hypothetical pensioner covered by

the plans whose benefits were computable, ranged from $ 127— his social security benefit— upward to more than $400 a month (table 13). No private benefits were payable by plans which offset the entire Federal benefit, because the

Federal benefits always equaled or exceeded the total benefit determined by the

plans* benefit formulas.

The average normal retirement benefit, 18 including maximum primary

social security and railroad retirement benefits, was $230. 10 a month— nearly

three-fifths of the hypothetical worker* s gross preretirement earnings. 19 For

^ Except for some small plans that based their benefits solely on earnings in excess of $400 a month, these

plans offset the entire Federal benefit.

17 Excludes 59 plans for which no benefit could be computed.

18 Arithmetic mean of normal retirement benefits, including social security or railroad retirement benefits,

weighted by the number of workers covered.

Maximum primary social security and railroad retirement benefits are 31.75 and 62.75 percent, respectively,

of average annual earnings of $4, 800.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
14

workers eligible for social security, the weighted average was $215.90 or 54 percent of the assumed preretirement earnings, while workers eligible for railroad

retirement received an average of $261, or almost two-thirds.20

All Railroad Other

plans plans plans

Number of unfunded plans for which benefits were computed* — 618 28 590

Average monthly normal retirement benefits for workers with

constant earnings of $4, 800 per year and 30 years of

credited service: 2

Including primary social security or railroad

retirement benefit ^ -------------------------------------------------------------- $230.10 $261.00 $215. 90

Percent of earnings-------------------------------------------------------------- 5 7.5 6 5.2 5 4.0

Excluding primary social security or railroad

retirement benefits---------------------------------------------------------------- $64. 40 $10.00 $88. 90

Percent of earnings-------------------------------------------------------------- 16.1 2 .5 22.2

1 See footnote 1, table 8.

2 Arithmetic mean of plan benefits computed from future service benefit formulas weighted

by number of workers covered.

3 Includes primary social security benefit of $127 or railroad retirement benefit of $251.

Since Federal benefits are not subject to the personal income tax and

since personal exemptions of persons over 65 are twice those of persons under

65, their after-tax postretirement incomes would be an even larger fraction of

their after-tax preretirement incomes. For some railroad workers, their net

incomes would be greater after retiring than when they were working.

Prenormal Retirement and Vesting

About 80 percent of the unfunded basic plans, covering 95 percent of the

workers, provided monthly retirement benefits to qualified workers retiring or

terminating their employment before the normal retirement age, i. e. , early

and/or disability retirement and vesting. (See table 4.) An immediate benefit

was permitted under early and disability retirement provisions, while all but one

plan, with a vesting provision, deferred payment to the normal retirement age. 21

An early retirement provision was included in more than half the basic

plans (358) covering three-fifths of the workers (table 14). Fifteen of these

plans also contained a "special" early retirement provision that permitted the

employer to compel early retirement. Inasmuch as the worker1 s retirement

was involuntary, he was afforded a larger benefit than the regular early retirement benefit. 22

20 The foregoing considers only benefits provided single men. If wives apply for benefits at age 65, a married

couple would, under the assumed conditions, receive an additional $63. 50 under the Social Security Act and $69. 90

under the Railroad Retirement Act.

21 "An early retirement provision, " as defined in this as in other BLS studies, refers to a provision that permits

workers meeting certain age and/or service requirements to retire before attaining the normal retirement age and

receive immediate benefits. It differs from the normal retirement provision in at least one of two respects: (1) A

smaller benefit is payable than would be payable at the normal retirement age to a worker with the same credited

earnings and service, and (2) the employer’s consent may be required.

22 See p. 16.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
15

Early Retirement

Eligibility Requirements. Age and service requirements are the principal criteria used to establish eligibility for early retirement. The employer*s

consent was another requirement specified by most plans.

More than 9 out of 10 workers belonged to plans with both age and service requirements (table 15). Plans covering two-fifths of the workers required

30 years of service and plans having, altogether, about the same fraction of the

workers required 15, 20, or 25 years of service. Three-fourths of the workers had to attain at least age 60 (by far the most prevalent age) for eligibility.

Only 2, 000 workers belonged to plans with no age or service requirements.

All but one plan permitted early retirement at least 5 years before the

normal retirement age— age 65 in all but nine plans— while roughly one-fourth

of the plans, covering almost the same ratio of workers, allowed as many as

10 years. Comparatively few plans permitted retirement more than 10 years

before the normal age. The number of years before the normal retirement

age that early retirement benefits were first payable is shown in the following cumulative tabulation:

Difference between normal

and early retirement ages

All plans with an early retirement provision1 -------

3 years or m ore-------------------------------------------------------

5 years or m ore-------------------------------------------------------

8 years or m ore-------------------------------------------------------

10 years or m ore-----------------------------------------------------

13 years or m ore-----------------------------------------------------

15 years or m ore-----------------------------------------------------

Not computable 2 -----------------------------------------------------

1 See footnote 1, table 8.

2 No age requirement for early retirement.

Workers

Plans (thousam

358 282

358 282

357 281

103 76

102 74

58 19

53 19

49 12

NOTE: Where alternative requirements were specified, the earliest possible age for men was used in this tabulation regardless of whether the employer's

consent was required.

Women were permitted to retire up to 5 years earlier than men in

15 plans covering 10, 000 workers, and up to 10 years earlier in 4 plans with

8, 000 workers. All but 1 of the 19 plans also specified a sex differential in

normal ages.

Three out of five workers, as shown in the tabulation on the next page,

belonged to plans permitting employees meeting the age and service requirements

to retire early at their own volition. However, the employer's consent was

required by many of these plans if the worker wished to retire even earlier

after meeting alternative age and service requirements. In addition, 1 out of

6 workers belonged to plans under which they could be involuntarily retired. 23

23 Excludes the "special" early retirement provision discussed in the next section.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
16

Approval of action by other party—

Total______ Required Not required

Plans

Workers

(thousands) Plans

Workers

(thousands) Plans

Workers

(thousands)

All basic plans with an early retirement

provision 1---------------------------------------------------------- 282 198 104 160 178

Early retirement may be initiated by 2—

W orker---------------------------------------------------------- 236 153 85 •5136 151

Worker or em ployer-------------------------------------- 69 47 4 45 19 5 24 27

* See footnote 1, table 8.

2 Excludes the "special" early retirement provision.

3 Includes 13 plans, covering 29,000 workers, that permitted retirement at the worker's request or under

mutually satisfactory conditions.

4 Required the employer's consent or his request.

5 Includes 2 plans, covering 5,000 workers, that permitted retirement at the worker's request or employer's request or under mutually satisfactory conditions and 8 plans covering 11,000 workers requiring the employer's request.

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

"Special" Early Retirement. In addition to a regular early retirement

provision, several plans in the food and primary metal industries permitted

workers to retire under a "special" early retirement provision. This provision

appears to combine elements of a severance arrangement and a modified disability retirement related to a worker*s incapacity to perform his job satisfactorily,

rather than to total and permanent disability.

Among the 15 plans providing for special early retirement, service requirements were generally less stringent than those required for regular early

retirement but the age requirements were, with one exception, the same. Only

2 plans stipulated the same service requirement as for regular early, and the

remaining 13 plans required 5 or 10 fewer years of service. In addition, all

plans allowed retirement "under mutually satisfactory conditions, " 24 except one

plan with 3,000 workers that permitted retirement solely at the worker*s request. Full normal benefits were payable immediately on retirement by all but

one plan, which paid twice the normal amount.

Disability Retirement

Disability retirement was the most prevalent benefit, apart from normal

retirement, provided by basic unfunded plans. 25 It was provided by about twothirds of the plans covering more than four-fifths of the workers (tables 4 and 14).

In addition, 96 plans without a disability retirement benefit made available

a partial substitute— early retirement benefits, or, in one instance, a vesting provision.

Eligibility Requirements. Age requirements for disability retirement

were, as a rule, lower than for early retirement, but the service requirements

were often greater than those for early retirement.

24 This term was not defined in any of these plans.

25 Under disability retirement provisions, pensions are payable to totally and permanently disabled workers

meeting specified age and/or service requirements. However, considerable variation existed among the plans studied,

as it does among funded plans, as to what constitute? total and permanent disability. Qualified workers generally

received benefits after a 6 - month waiting period.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
17

Although the attainment of age 55 or 60 was almost always required

for early retirement, almost four-fifths of the plans did not specify an age requirement for disability retirement (table 16). The remaining plans usually had

a minimum age of 50 years. However, this waiver of age requirements was

often qualified by long service requirements. More than nine-tenths of the

workers belonged to plans with service requirements that ranged from 10 to

30 years— most often 15 years.

Benefit Formulas. Almost four-fifths of the workers belonged to plans

paying the same disability benefits for comparable earnings and service as for

normal retirement. Plans with about half the remaining workers modified their

normal benefit formulas to provide greater benefits and the rest modified them

to provide less.

Disability retirement benefits were less frequently integrated with Federal

disability benefits (social security or railroad retirement benefits)26 than were

normal retirement benefits. About one-fourth of the plans, covering less than

half of the workers, integrated disability benefits as compared with two-fifths of

the plans with two-thirds of the workers that integrated normal benefits. All

but one plan used the offset method for disability benefits while only three-fourths

used it for normal benefits. The entire Federal benefit, as shown in the following tabulation, was deducted in about two-thirds of the integrated plans.

Workers

Integration provision Plans (thousands)

All basic plans with a disability retirement provision1 ----------- 432 375

No integration provision— -------------------------------------------------------- 2 3 2 7 205

Integrated plans-------------------------------------------------------------------------- 105 170

All Federal benefits deducted:

All social security disability benefit deducted-------------- 362 66

All railroad retirement benefit deducted------------------------ 4 6 36

One-half social security disability benefit deducted-------— 27 29

$80 for social security disability benefit deducted------------ 4 28

85 percent railroad retirement benefit deducted---------------- 1 1

Other-------------------------------------------------------------------------------------- 5 S 10

1 See footnote 1, table 8.

2 Includes a few plans, covering about 1,000 workers, for which no information was available. 2

Includes 10 plans, covering fewer than 500 workers, that used allowances

provided under the 1936 Social Security Act.

4 Includes 1 plan, covering fewer than 1,000 workers, that utilized the excess

earnings method.

5 Plans provide the greater of alternative benefits, with social security disability benefits deducted from 1 or more of the alternatives.

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

26

Social security disability benefits are payable to disabled workers, regardless of age, with 5 years of social

security credit in the 10 years preceding disablement. The benefits are the same as those payable for old-age retirement at age 65. Railroad retirement disability benefits are payable to disabled workers regardless of age with

20 years of service or at age 60 with 10 years of service. Railroad benefits, like social security benefits, are computed in the same way as those for old-age retirement.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
18

Level of Benefits. The level of benefits was computed under certain

uniform assumptions similar to those used in computing normal retirement benefits. The assumptions were:

1. Retirement at age 50.

2. Twenty years of credited service.

3. Annual earnings of $4,800. (Since such earnings were assumed to

be constant throughout the worker’ s career, an important difference between

plans basing benefits on career earnings and those using terminal earnings

was not taken into account. )

4. Eligibility for and receipt of maximum social security disability

benefits of $127 a month or of railroad retirement benefits of $167 a month. 27

Benefits were computed for 55 percent of the basic plans (237) that permitted retirement for total and permanent disability. These plans covered a

slightly larger fraction of workers (a total of 210,000) (table 17). Benefits could

not be computed for the other plans either because their minimum age or service requirements were greater than those assumed for this study (94 plans with

137, 000 workers) or because of unspecified actuarial reductions^ unknown amounts

of integrated funded benefits, or unavailability of formula information (101 plans

with 28, 000 workers).

Plans with one-fourth of the workers for which the hypothetical benefits

could be computed would, under the assumed conditions, pay $50 to $60 a month

exclusive of social security disability or railroad retirement benefits. Plans with

about two-fifths of the workers provided over $60 a month. 28 The average disability benefits payable, weighted by the number of workers covered, was $56. 40. 29

The total monthly benefit amount, including a maximum social security

disability benefit of $127 or $167 from a railroad retirement benefit, whichever

was applicable, ranged from $127 (less than one-third of the assumed $400-amonth preretirement earnings level) to over $265, or at least two-thirds of preretirement earnings (table 18). The weighted average was $190.20 a month, or

almost half the assumed preretirement earnings.

Vesting Provisions

Less than 1 out of 8 workers covered by unfunded plans belonged to one

with a vesting provision (table 14). 30 The relatively low frequency of vesting,

as compared with funded plans, presumably stems from the difference in financing. Perhaps because vesting is less of a potential financial strain on employers who have regularly set aside funds as benefits accrued, funded plans are

more inclined to include vesting. However, about half the unfunded plans without a vesting provision (296 plans covering more than a quarter million workers)

had early retirement provisions, under which the accrued benefits of terminated

older workers with long service may be vested. Plans with vesting provisions

^ An exception to the social security maximum was made in a few instances where a plan was self-terminating,

i. e ., applying to workers who had retired prior to some past date, and whose plan benefits were integrated with the

maximum social security benefit at that time, e. g ., $108. 50 a month.

28 Four plans, covering about 7 percent of the workers, provided no benefit under the assumed conditions because of the railroad retirement benefit integration. These plans, do, however, pay benefits to workers entitled to

less than the maximum Federal benefit.

29 Weighted by the number of workers covered.

30 por definition of "vesting, " op. cit., footnote 2, p. 2.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
19

covered about three-tenths of the workers belonging to unfunded plans in manufacturing industries. Most of them were employed in the primary metals and

food industries (table 14). Only a few thousand workers employed in nonmanufacturing industries belonged to plans with vesting.

Eligibility Requirements. In addition to meeting age and service requirements somewhat more liberal than those for early retirement, workers had

to be involuntarily separated to qualify under the vesting provisions of 39 of the

64 plans with vesting. However, somewhat over half the workers (31, 000 out

of 57,000) belonged to plans without this restriction. Many of the unfunded plans

conditioning vesting on a permanent shutdown were in the metalworking industries where funded plans have similar vesting requirements.

Terminated workers usually also had to attain 15 years of service, age 40,

or (more often) both, to qualify (table 19). Four plans, covering a significant

number of workers, required both age 55 and ZO years of service.

Benefit Formulas. All vested workers were eligible for the full benefits to which their earnings and service entitled them under the normal retirement formula. These benefits were payable commencing at the normal retirement

age— age 65 in every-plan. One plan, covering 1,366 workers, permitted workers to choose, instead, an immediate benefit in a reduced amount.

Death Benefits 31

Death benefits were provided by 116 basic plans covering about 88,000

workers, or nearly 1 out of 5 workers (table 20). The survivors of over 95 percent of the covered workers were eligible for benefits if death occurred after retirement and of more than 70 percent if death occurred before retirement.

A payment-certain guarantee 32 was provided by very few more plans

than a lump-sum benefit, but the latter was applicable to 70 percent of the workers

with death benefits while the former covered 20 percent. The remaining workers

were provided a widow’s benefit. 33 A widow's benefit was the only type of death

benefit that was payable only before retirement. The prevalence of the three

types of death benefits, and the type of workers covered, are shown in the following tabulation:

_______ _______Type of workers__________________

Active and retired Retired only

Workers Workers

Type of death benefit Plans (thousands) Plans (thousands)

All basic plans with a death benefit *------------------------- 67 65 49 25

Lump-sum payment----------------------------------------- ............. 35 51 16 10

Payment-certain guarantee-----------------------------

............. ,22 6 32 12

Widow's b en efit---------------------------------------------------------- 210 8 1 3

1

See footnote 1, table 8.

Includes 7 plans with 4, 000 workers that covered active workers only.

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

3* A death benefit is a payment or payments made automatically to survivors upon the death of a covered

worker or pensioner. See Pension Plans Under Collective Bargaining: Benefits for Survivors, Winter 1960—61 (BLS

Bulletin 1334, 1962), p. 3.

32 A payment-certain guarantee assures a plan member and his beneficiary that they jointly will receive a

minimum number of monthly benefit payments regardless of when the member dies.

3.3 A widow's benefit continues the deceased member's benefit, all or in part, to his widow for the rest of her

life or until she remarries.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
20

Survivor Options

Another method of protecting the survivors of retirees is to permit workers to choose a reduced annuity with specified benefits for their survivors in

place of the straight life annuity normally paid by the plan. As in funded plans,

two types of survivor options were offered: (1) Joint and survivor, and (2) period

certain. 34 Unlike death benefits, the cost of these options was typically borne

solely by the retiree, because the optional annuity provided a smaller monthly

benefit of the same actuarial value as the regular pension payable to him. The

reduction in benefits to the retiree selecting the joint and survivor option depends

on the age and sex of both the retiree and joint annuitant at the time of retirement, as well as the amount of benefit to be continued after the retiree's death.

The reduction in the monthly benefit for a guarantee of a given duration depends

solely on the age and sex of the pensioner. The principal difference between

this option and the joint and survivor option is that the latter guarantees payment

of benefits over the combined life spans of two persons, regardless of how long

that may be.

Survivor options were made available by 107 plans with 107, 000 workers,

or almost 1 out of 4 workers. All but one plan, covering 20, 000 workers, provided a joint and survivor option. A period-certain option was offered by eight

plans to about 30,000 workers.

Type of survivor option Plans

Workers

(thousands)

All supplementary plans with a survivor option1 ------- 107 107

Joint and survivor o n ly ----------------------------------------------- 99 76

Period certain only----------------------------------------------- --— 1 20

Joint and survivor and period certain-------------------------- 5 4

Any "standard" option--------------------------------------------------- 2 6

1 See footnote 1, table 22.

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

34 A joint and survivor option pays the retiree a reduced annuity until his death, after that, a previously

specified annuity is paid for life to his designated beneficiary or, more technically, "joint annuitant." A periodcertain option insures payment of an annuity for a specified period of time, thereby assuring the retiree and his

survivor that they and/or their heirs, will jointly receive a minimum number of payments specified by the guarantee.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
21

Supplementary Plans

Supplementary plans— plans that supplement funded pension plans— applied

to 904,000 workers, or two-thirds of the workers in all unfunded plans.35 A lthough three-fourths of the plans in this group were established since World

War II, the 113 plans represented only about one-fifth of the workers because

about 1Z large plans established in 1913 in the telephone industry now cover nearly

500.000 workers.

Eighteen plans, each with 10, 000 or more workers, accounted for over

700.000 workers (table 2). Over two-fifths of the plans covered fewer than

300 workers each.

Seven-tenths of the workers were employed in nonmanufacturing industries, chiefly in telephone communications (table 5). Two-thirds of the plans,

covering three-fourths of the workers in manufacturing industries, were in nondurable goods, with the largest number of workers employed in chemicals.

Three principal provisions applicable to a significant number of workers

were found in supplementary plans: Disability retirement benefits, death benefits, and additional benefit amounts. Chiefly because only the first two benefits

were provided by the large telephone company plans, over 750,000 workers were

covered by disability retirement plans and over 600, 000 by death benefits.

Disability Retirement

Slightly more than two-fifths of the supplementary plans, covering more

than four-fifths of the workers in such plans, provided disability retirement benefits (table 21). Most of the covered workers were employed in telephone companies. There were also significant numbers employed in chemicals (70, 000),

electric and gas utilities (48,000), and petroleum refineries (35,000).

Eligibility Requirements. Almost a fifth of the plans merely required the

worker to show that he was sufficiently disabled to qualify for a pension. At

least 15 years of service was the most common requirement (table 22), but, in

contrast with many basic plans (both funded and unfunded) only six plans had an

age requirement.

Benefit Formulas. As under basic plans (both funded and unfunded) disability benefits were based, at least in part, on the normal retirement formula.

Plans covering 9 out of 10 workers had formulas that provided benefits equal to

or greater than the normal retirement benefits provided workers with the same

earnings and service by the associated funded basic plan.

Half the plans, covering four-fifths of the workers, integrated their

benefits with social security disability benefits as shown in the tabulation on the

following page. Almost all used the offset method, which provides larger benefits to workers who are eligible for private plan benefits, but not for social

security benefits, than do the other methods. Most plans, including the large

telephone plans,36 offset half the public benefit— the same offset as they used in

their normal benefit formula.

The administrators of these plans apparently regarded them as part of their pension program because they all

checked item 3B, "Pension Benefit Plan, " or, in a few instances, item 36, "Combination of Welfare and Pension

Plan, " on disclosure Form D -l. Moreover, the close relationship of benefits provided by the supplementary plans to

those provided by the funded program was often shown by the use of the same or similar benefit formula, eligibility

requirements, etc.

36 In 1963, the telephone companies announced that the offset would be reduced to one-third of primary social

security benefits.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
22

Workers

Integration provision Plans (thousands)

All supplementary plans with a disability retirement provision*----- 73 752

No integration provision--------------------------------------------------------------------- 2 36 153

Integrated plans------------------------------------------------------------------------------------ 3 7 598

All social security disability benefit deducted------------------------------ 5 28

One-half social security disability benefit deducted-------------------- 27 557

One-fourth social security disability benefit deducted---------------- 1 1

$30 for social security disability benefit deducted---------------------- 1 7

Other-------------------------------------------------------------------------- -------------------- ^ 3 6

1 See footnote 1, table 2 2 .

2 Includes 1 plan, covering 3, 000 workers, for which no information was available.

3 Plans offer the greater of alternative benefits, with social security disability benefits deducted from 1 or more of the alternatives.

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

Level of Benefits. Plans covering three-fourths of the workers provided

disability benefits of $20 to $30 a month to disabled workers with the same age,

service, and earnings assumed in computing disability benefits under basic plans

(table 17). 37 Benefits would be larger under nearly all of the remaining plans.38

The weighted average benefit of $29. 70 a month was about half the average disability benefit computed under the same conditions for unfunded basic plans.39 The

average was largely determined by the telephone plans which provided $21.50 a

month under the assumed conditions.

Total monthly benefits, including maximum social security disability

benefits of $127, would range from $127 to $270; from less than one-third

to more than two-thirds of preretirement earnings (table 18). The weighted

average benefit would be $156.70 (two-fifths of preretirement earnings) or fourfifths of the average total benefit amount payable by the basic plans. Chiefly

because the large telephone company plans would provide $148.50 a month (including social security), plans covering 70 percent of the workers would provide

$140 to $150 a month.

Death Benefits

Although only 34 plans granted a death benefit, they covered two-thirds of

the workers under supplementary plans. Nearly all plans, as shown in the tabulation on the next page, provided benefits for both active and retired workers,

and all but two made lump-sum payments.

Lump-sum payments were paid by 18 plans in the communications industry (520, 000 workers) and by 14 small plans— all but 1 of which were in manufacturing industries. The 1-year payment-certain guarantee was provided by a

petroleum refining company (35,000 workers) and the widow*s benefit by an electric

utility (28, 000 workers).

37 Benefits were computed for 52 plans covering nine-tenths of the workers in the 73 plans that permitted disability retirement. Benefits could not be computed for 21 plans, usually for the same reasons they could not be computed for basic plans. (See p. 18. )

38 Six plans, covering the great majority of workers provided no benefit because of social security disability

offset. These plans do, however, pay benefits to workers entitled to less than the maximum Federal benefit.

39 Basic plans under the Railroad Retirement Act have been excluded from this and subsequent comparisons because no plans in the railroad industry provided supplementary benefits.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
23

Type of death benefit

All supplementary plans with a death benefit1 ---------

Lump-sum payment-----------------------------------------------------

Payment-certain guarantee-----------------------------------------

Widow's benefit-----------------------------------------------------------

Type of workers

Active and retired

Plans

Workers

(thousands)

27 595

2 25 532

1 35

1 28

Active only

Workers

Plans (thousands)

7 9

7 9

1 See footnote 1, table 22.

2 Includes 1 plan, with 3, 000 workers, that covered only retired workers.

The amount of the lump-sum benefit paid by the telephone pension plans

depends on when the worker dies.40 If he dies before he retires, the benefit

equals 4 months' earnings for service of 6 months but less than 2 years, increased by 2 months' earnings for each additional year of service to 12 months'

earnings for 5 or more years, or $250, whichever is greater. If he dies after

retiring, the benefit is the greater of his annual earnings at retirement reduced

10 percent for each full year elapsed since retirement and his annual pension.

Additional Benefit Amount

Some unfunded plans supplemented the benefits under funded plans and,

occasionally, the benefits under unfunded plans, by paying additional benefits for

the same cause (e.g. , normal retirement or disability retirement). These additional payments, provided by nearly 3 out of 5 supplementary plans covering 1 out

of 5 workers under such plans, increased the amount of benefits payable to a beneficiary but, unlike the supplementary plans previously described, did not affect

the number of different types of benefits provided.

The additional benefit amounts were provided in several different ways.

The group of plans with the largest number of workers (93, 000) guaranteed a

minimum retirement benefit applicable to specified funded benefits or often to

all benefits, funded and unfunded. 41 Other plans supplemented their funded benefits by granting pensioners additional benefits, such as cost-of-living allowances.

Pensions (normal, early, and disability) based on past service— i. e. , service

prior to the adoption of a funded pension plan— were provided by a number of

unfunded plans. Still others supplemented funded plans by paying pensions to

workers who retired before a specified date— usually the effective date of the associated funded plan— or to workers who were ineligible for benefits under the

funded plan, such as retired workers with insufficient service to qualify for a

funded pension. And, finally, a small number of plans paid social security adjustment allowances to workers retiring early under a funded plan. These allowances temporarily take the place of social security benefits that are not payable

immediately on retirement.

40 Additional benefits are usually payable under the company's life insurance plans; cf. Digest of One Hundred

Selected Health and Insurance Plans Under Collective Bargaining, Winter 1961—62 (BLS Bulletin 1330, 1962),

pp. 168-173.

41 If the minimum was applicable only to unfunded benefits it would be classified as part of the unfunded benefits) to which it applied, rather than to supplementary benefits, here.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
24

T a b le 1. Y e a r o f E s ta b lis h m e n t o f U n fu n d ed P e n s io n

P la n s b y T y p e o f P la n , S p r in g 1962

(W o r k e r s in th o u sa n d s )

Y e a r o f e s t a b lis h m e n t

B a s ic p la n S u p p le m e n ta r y

p la n

P la n s W o r k e r s 1 P la n s W o r k e r s 1

A ll p la n s __ _____ ____ 677 462 174 904

B e f o r e 1920 ____________ 11 98 17 515

1920 th ro u g h 1944 ____ 73 47 21 84

1945 th ro u g h 1 9 5 9 2___ 375 204 113 164

N o t a v a il a b l e ___ _____ 218 114 23 141

1 I n c lu d e s b o th a c t iv e and r e t ir e d w o r k e r s c o v e r e d 

in I9 6 0 .

2 S in ce o n ly p la n s that fi le d fin a n c ia l r e p o r t s (F o r m 

D -2 ) f o r 1959 a r e in c lu d e d in the stu d y , p la n s e s t a b lis h e d 

in I9 6 0 and s u b s e q u e n t y e a r s a re o m it t e d .

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l ite m s 

m a y n o t e q u a l t o t a ls .

T a b le 2 . U n fu n d ed P e n s io n P la n s b y N u m b e r o f W o r k e r s 

C o v e r e d and T y p e o f P la n , S p r in g 1962

(W o r k e r s in th o u sa n d s )

N u m b e r o f 

w o r k e r s c o v e r e d

B a s ic p la n S u p p le m e n ta r y

p la n

P la n s W o r k e r s 1 P la n s W o r k e r s 1

A ll p la n s ........ ....................... 677 4 62 174 9 04

2 6 - 9 9 ....................................... 313 18 50 3

1 0 0 - 2 9 9 ................................. 187 33 25 7

3 0 0 -4 9 9 27 12 20 6

5 0 0 -9 9 9 .............................. 76 51 13 9

1 ,0 0 0 - 4 , 9 9 9 ____________ 62 131 36 84

5 ,0 0 0 - 9 ,9 9 9 5 38 12 88

1 0 , 0 0 0 - 2 4 , 9 9 9 _________ 4 62 5 73

2 5 , 0 0 0 - 4 9 , 9 9 9 _________ 3 118 8 261

5 0 , 0 00 o r m o r e _ ___ 5 373

1 S e e fo o tn o te 1, ta b le 1.

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l it e m s 

m a y n o t e q u a l t o t a ls .

T a b le 3. B e n e fit s P r o v id e d b y U n fu n d ed P e n s io n P la n s 

b y T y p e o f P la n , S p r in g 1962

(W o r k e r s in th o u sa n d s )

Type of benefit

Basic plan Supplementary

plan

Plans Workers 1 Plans Workers 1

All plans— ________ ______ ____ 677 462 174 904

Normal retirem en t________ ___ _ 677 462

Earlv retirem ent--------------------------------------- 358 282 1 28

Disability retirement 432 375 73 752

V e stin g_____ _______ 64 57 _ _

Death benefits____________ 116 88 34 604

Survivor options 107 107 _ _

Special early retirem en t____ _______ 15 33 - -

Special vacation p a y __ _______ ____ _ 19 18 - -

Additional benefit amounts_______________ - - 100 189

Supplement (not a minimum)_________ - - 42 48

Minimum - - 29 93

Past s e r v ic e ___________________________

Social security adjustment

- - 20 35

allowance__ _______ __ _________ - - 13 49

Other____ __ ______________ 8 77

1 S e e fo o t n o t e 1, ta b le 1.

N O T E : B e c a u s e m a n y p la n s p r o v id e m o r e th an 1 b e n e fit , the t o ta ls a r e

le s s th an th e s u m s o f the in d iv id u a l it e m s .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
25

T a b le 4 . A m o u n t o f B e n e fits P a id in I9 6 0 b y T y p e o f B e n e fits P r o v id e d b y U n fu n d ed P e n s io n P la n s , S p rin g 1962

(W o r k e r s in th o u sa n d s )

Total With death benefit Without death benefit

Type of benefit

Plans Workers 1

Amount

of benefits

paid

(thousands)

Plans Workers 1

Amount

of benefits

paid

(thous ands)

Plans W orkers 1

Amount

of benefits

paid

(thous ands)

AU p la n s_____________________________ 851 1, 367 $ 115,447 150 692 $64, 390 701 675 $ 5 1 ,0 5 7

Basic plans___________________ 677 462 $ 51, 304 116 88 $ 13, 036 561 374 $ 38,268

Normal retirem ent_________________

Normal, early, and disability

148 25 11,946 21 3 1, 840 127 22 10, 106

retirement, and vesting 1 2 ________

Normal, early, and disability

62 53 1,823 5 5 50 57 48 1,773

retirem ent__________ ____________ 200 170 17,614 33 31 3,413 167 139 14,201

Normal and early retirem en t_____

Normal and disability

96 60 3, 835 26 35 2, 141 70 25 1,694

retirem ent_____ __________________

Normal retirement and

170 153 16,034 3 31 15 5,592 139 138 10,442

vesting--------------------------------------------- 1 2 52 - - - 1 2 52

Supplementary plans________ 174 904 64, 143 34 603 51,354 140 301 12,789

Disability retirem ent______________

Disability retirement and

61 639 51,117 4 26 591 50, 261 35 48 856

additional benefits________________

Disability retirement and other

7 41 1, 802 2 11 1, 084 5 5 30 718

benefits___________ ________ ____ __ 5 72 2,911 - - - 5 72 2,911

Death benefits______________________ 6 2 9 6 2 9 - - -

Additional benefits 93 149 8, 129 - - - 93 149 8, 129

Other ben efits_______________________ 2 2 175 - - - 2 2 175

1 S ee fo o tn o te 1, ta b le 1.

2 I n clu d e s 15 p la n s that a ls o p r o v id e d " s p e c i a l " e a r ly r e t ir e m e n t .

3 I n clu d e s 1 p la n , c o v e r in g 2, 000 w o r k e r s , th at a ls o p r o v id e d v e s t in g .

4 I n c lu d e s 1 p la n , c o v e r in g 2 8 , 000 w o r k e r s , th at a ls o p r o v id e d e a r ly r e t ir e m e n t .

5 I n c lu d e s 1 p la n , c o v e r in g 3, 000 w o r k e r s , that a ls o p r o v id e d o t h e r b e n e fit s .

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l it e m s m a y n o t e q u a l t o t a ls .

T a b le 5. U n fu n ded P e n s io n P la n s b y I n d u s try an d T y p e o f P la n , S p r in g 1962 

_____________ (W o r k e r s in th o u sa n d s )________________

In d u s try

B a s ic p la n

P la n s W o r k e r s 1

S u p p le m e n ta ry p la n

P la n s W o r k e r s 1

A ll in d u s t r ie s 2

M a n u fa c t u r in g _______________________________________

D u ra b le g o o d s ________________________________________________

S to n e , c la y , an d g la s s p r o d u c t s --------------------------------

P r i m a r y m e t a l in d u s t r ie s _____________________________

F a b r ic a t e d m e t a l p r o d u c t s ____________________________

O th e r d u ra b le g o o d s ____________________________________

N o n d u ra b le g o o d s ___________________________________________

F o o d and k in d r e d p r o d u c t s ____________________________

T e x t ile m il l p r o d u c t s ___________ - ______________________

P r in t in g , p u b lis h in g , an d a llie d in d u s t r ie s -----------

C h e m ic a ls and a llie d p r o d u c t s _______________________

P e t r o le u m r e fin in g and r e la t e d in d u s t r ie s ________

O th e r n o n d u ra b le g o o d s ________________________________

N o n m a n u fa c t u r in g -----------------------------------------------------

R a ilr o a d t r a n s p o r t a t io n ------------------------------------------------------

M o t o r t r a n s p o r t a t io n ______________________________________

C o m m u n ic a t io n s _____________________________________________

U t ilit ie s : E l e c t r i c and g a s ________________________________

W h o le s a le and r e t a il t r a d e ________________________________

F in a n c e , in s u r a n c e , and r e a l e s t a t e ___________________

O th e r n o n m a n u fa ctu r in g in d u s t r ie s _____________________

677 4 62 174 904

4 04 188 92 226

136 81 32 54

31 6 (3 4) (3 )

22 41 9 17

37 9 12 9

4 46 24 11 28

268 107 60 172

17 18 (5 ) (5 )

56 9 ( ) < ) 22 14 (5 ) (5 )

85 29 5 82

(5 ) (5 ) 25 60

88 37 30 31

263 2 7 4 81 642

28 144 (6 ) (6 )

30 20 (6 ) (6 )

25 11 18 520

51 21 22 70

21 52 2 30

46 20 27 8

4 62 7 12 14

1 S ee fo o t n o t e 1, ta b le 1.

2 I n c lu d e s 10 b a s ic an d 1 s u p p le m e n t a r y p la n , w ith a t o ta l o f 3 6, 000 w o r k e r s , w h ic h c o v e r e d b o th 

m a n u fa ctu rin g an d n o n m a n u fa ctu r in g e s t a b lis h m e n t s .

3 I n clu d e d in o th e r d u r a b le g o o d s .

4 I n c lu d e s p la n s c o v e r in g f i r m s e n g a g e d in b o th d u ra b le and n o n d u ra b le g o o d s m a n u fa c tu r in g .

5 I n clu d e d in o th e r n o n d u ra b le g o o d s .

6 I n clu d e d in o t h e r n o n m a n u fa ctu r in g in d u s t r ie s .

N O T E : B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l it e m s m a y n o t e q u a l t o t a ls .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
26

T a b le 6 . M in im u m A g e an d S e r v ic e R e q u ir e m e n t s f o r N o r m a l R e t ir e m e n t in U n fu n d ed B a s ic P e n s io n P la n s , S p r in g 1962

(Workers in thousands)

Minimum service requirem ent1

Total

Minimum age requirement1 2

Age 60 Age 65 Age 70 Other

Plans Workers 3 Plans Workers 3 Plans Workers 3 Plans Workers 3 Plans Workers 3

All plans with a normal retirement

provision _ _ _ _ _ _ _ ----- 4677 462 42 22 569 416 31 21 20 1

No service requirement— __ __ 45 34 _ _ 33 29 5 12 5

Less than 10 years _ _ _ 48 16 - - 33 15 15 1 - _

10 years __ — __ _ _ _ _ 122 51 - - 121 51 1 1 - _

15 years ______ _ _ _ ----- 177 114 6 30 1 147 113 - _ _ _

20 years __ __ _ _ _ _ _ _ _ _ _ _ 165 173 3 8 159 150 3 14 _ _

25 years ________ _ ----- _ 82 68 6 9 76 59 - - - _

30 years _ _ __ — 3 4 3 4 - - - - - -

Other ___ ____ 20 1 " “ “ “ “ 20 1

1 For those plans which specified that a period of employment be served before participation in the plan could begin,

the minimum service requirement includes the participation service and the required plan membership service.

2 In 21 plans, covering 25,000 w orkers, alternative requirements wqre specified; the 1 with the earliest age requirement

at the w orker's option is shown, or the earliest age or no age requirement is used if no worker option was permitted. In

49 plans, covering about 103,000 workers, age requirements were lower for women. Age differences ranged from 3 to 10

years with a 5-year sex differential the m ost prevalent.

3 See footnote 1, table 1.

4 Includes 15 plans for which minimum age and service requirements were not available.

5 Includes 6 plans, covering about 2 ,5 0 0 workers, that specified a minimum age requirement of 68.

6 Includes plans, covering nearly 1,000 workers, that specified no age requirement.

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

Table 7. Provision for Integration of Prim ary Social Security or Railroad Retirement Benefit With

Basic Benefit by Type of Basic Benefit Formula, Spring 1962

(Workers in thousands)

I n te g r a tio n p r o v is i o n

Total

Basic benefit formula based on—

Earnings

and service Earnings Service Uniform

amount Other

Plans Workers 1 Plans Workers 1 Plans Workers 1 Plans Workers 1 Plans Workers 1 Plans Workers 1

All^plans with a basic

benefit provision __ _ __ * 677 462 346 349 46 7 200 84 61 9 14 13

No integration provision________ 2401 168 137 71 10 (3 ) 170 80 61 9 13 8

Integrated plans __ __ __ _ 276 294 209 278 36 7 30 4 - - 1 5

Offset method_________________ 208 194 141 178 36 7 30 4 - - 1 5

All prim ary social

security benefit— 94 110 43 100 30 2 20 2 - - 1 5

One-half prim ary social

security benefit__ 86 47 70 41 6 5 10 2 - - - -

$85 for prim ary social

security benefit__________ 22 7 22 7 - - - - - - - -

$80 for prim ary social

security benefit-. 5 29 5 29 - - - - - - - -

85 percent railroad

retirement benefit— ____ 1 1 1 1 - - - - - - - -

Step rate method ______ 56 50 56 50 - - - - - - - -

Excess earnings method_____ 12 50 12 50 ~ “ - - - -

1 See footnote 1, table 1.

2 Includes 10 plans, covering 1, 000 workers, for which no information was available regarding what basic benefit formula was based on.

3 Fewer than 500 workers.

N O T E : B e c a u s e o f r o u n d in g , s u m s o f in d iv id u a l it e m s m a y n o t e q u a l t o t a ls .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
27

T a b le 8 . P e r c e n t a g e F a c t o r s U s e d in U n ifo r m P e r c e n t F o r m u la s and (the R e d u c t io n o f P la n B e n e fits b y E ith e r P r im a r y 

S o c ia l S e c u r it y o r R a ilr o a d R e t ir e m e n t B e n e fit, b y E a rn in g s C o m p u ta tio n U t iliz e d , S p r in g 1962 1

(W o r k e r s in th o u sa n d s )

Offset provision and

percentage factor

applied to earnings

Total

Years iof earnings utilized—

Each year Last 10 years 5 highest of

last 10 years Last !5 years Other

Plans Workers Plans Workers Plans Workers Plans Workers Plans Workers Plans Workers

All plans with uniform

percentage form ulas---------------- 336 306 214 166 41 95 9 23 44 12 28 9

All primary social security

benefit deducted------------------------ 69 96 44 19 15 77 _ _ _ _ 10 (2)

1 .0 percent----------------------------- 18 91 13 15 5 76 - - - - -

2. 0 percent----------------------------- 21 3 21 3 _ _ - _ _ _ _ _

Other----------------------------------------- 30 2 310 (2) 4 10 1 _ _ _ _ 510 (2)

One-half primary social

security benefit deducted-------- 75 44 53 40 21 3 _ _ 1 1 - _

1. 0 percent------------------------------ 36 10 26 7 10 3 _ - - _ _ _

1. 5 percent------------------------------ 35 23 24 22 10 (2) - - 1 1 - -

1.67 percent---------------------------- 2 7 2 7 - - - - - - - _

2. 0 percent----------------------------- 1 4 1 4 _ _ _ _ _ _ _ _

O ther---------------------------------------- 1 1 _ _ 1 1 _ _ _ _ _ _

$85 for primary social

security benefit deducted------- 22 7 22 7 _ _ _ _ _ _ _

1. 0 percent----------------------------- 12 6 12 6 - _ _ _ _ _ _

1. 25 percent---------------------------- 10 1 10 1 - _ _ _ _ _ _

$80 for primary social

security benefit deducted-------- 5 29 1 15 4 14 _ _ _ _ _ _

1. 0 percent------------------------------ 4 14 - - 4 14 _ _ _ - _ _

1. 25 percent---------------------------- 1 15 1 15 - - _ - _ _ _ _

All railroad retirement

benefit deducted------------------------ 2 4 _ _ _ _ _ _ 1 2 1 2

1. 1 percent----------------------------- 1 2 - - - _ _ _ _ _ 6 1 2

1. 5 percent----------------------------- 1 2 - - - - - _ 1 2 _ _

85 percent for railroad retirement benefit deducted------------- 1 1 1 1 _ _ _ _ _ _ _

No deduction for primary

social security or railroad

retirement benefits------------------ 162 126 93 85 1 1 9 23 42 9 17 7

0. 7 percent------------------------------ 1 1 _ _ _ _ _ _ _ 7 1 1

0. 75 percent---------------------------- 7 12 8 6 8 _ _ _ _ 1 4 _ _

1. 0 percent----------------------------- 44 83 32 66 _ _ 2 17 10 (2) _ _

1. 1 percent----------------------------- 42 16 35 10 - _ 7 6 _ _ _

1. 25 percent------------------------- — 10 1 10 1 _ - _ _ _ _ _ _

1. 5 percent------------------------- :— 16 3 - - _ _ _ _ 16 3 _ _

1.75 percent---------------------------- 1 1 - - 1 1 _ _ _ _ _ _

2. 0 percent------------------------------ 15 2 10 (2) _ _ _ _ 5 1 _ _

Other ---------------------------------------- 26 6

' ' '

9 10 (2) 1016 6

1 Based on a study of 677 unfunded basic pension plans covering approximately 462, 000 active and retired workers in I960.

2 Fewer than 500 workers.

3 Includes, for example, plans providing 40 percent of average monthly earnings during last full year of employment.

4 Includes, for example, plans providing 40 percent of average annual earnings during last 15 years of employment.

5 Includes, for example, plans providing benefit amounts entirely at discretion of board of directors.

6 Benefit is based on 5 highest consecutive years' earnings.

7 B e n e fit is b a s e d o n 10 h ig h e s t c o n s e c u t iv e y e a r s ' e a r n in g s .

8 Includes some plans, covering fewer than 500 workers, that based the benefit on total earnings.

9 Includes, for example, plans providing 25 percent of average annual earnings during last 5 years of employment.

u Includes, for example, plans providing a lum p-sum benefit graduated by earnings and service.

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

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
28

Table 9. Basic Monthly Normal Retirement Benefit for Each Year of Credited Service

by Maximum Years of Service Allowed, Spring 1962 1

(Workers in thousands)

Monthly benefit for each

year of service

Total

Maximum years of credited service allowed

No maximum 20 years 25 years 30 years

35

or

years

m ore

Plans Workers Plans Workers Plans Workers Plans Workers Plans Workers Plans Workers

All plans in which normal

benefits vary by se rv ice--------- 200 84 27 37 20 6 35 5 65 20 53 16

$ 1 .0 0 ---------------------------------------------- 26 7 1 1 2 25 6

$ 1 .5 0 ---------------------------------------------- 12 8 1 1 10 4 _ _ 1 2 _ _

$ 1 .7 5 ---------------------------------------------- 1 3 1 3 _ _ _ _ _ _ _ _

$ 1 .8 0 ---------------------------------------------- 1 (3) _ _ _ _ - - - _ 1 (3)

$2. 00--------------------------------------------- 55 21 3 4 10 1 10 1 16 8 16 8

$2. 25---------------------------------------------- 16 6 6 6 _ _ _ _ 10 1 _ _

$2. 50---------------------------------------------- 2 (3) 1 (3) _ _ - - 1 (3) _ _

$3. 33---------------------------------------------- 11 2 _ _ _ _ _ _ 411 2 _ _

$4. 33--------------------------------------------- 5 3 _ _ _ _ 5 3 _ _ _ _

Other 5 ------------------------------------------- 71 33 14 23 - -

20 11 1 6 36 8

1 See footnote 1, table 8.

2 Includes plans covering about 2, 000 workers for which one-half primary social security is deductible.

3 Fewer than 500 workers.

4 Includes plans covering about 2, 000 workers for which all primary social security is deductible.

5 Includes plans providing a uniform monthly benefit in addition to a benefit graduated by years of service.

6 Includes plans covering fewer than 500 workers for which all primary social security is deductible.

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

Table 10. Minimum Benefit Provisions by Type of Basic Benefit Formula in Unfunded Pension Plans, Spring 1962 1

(Workers in thousands)

Type of minimum benefit provision

Total

Basic benefit formula based on—

Earnings and

service Earnings Service Other

Plans Workers Plans Workers Plans Workers Plans Workers Plans Workers

All plans with a minimum benefit provision____ 279 195 240 170 25 6 1 8 13 11

Flat benefit varying by se rv ic e----------------------------- 144 116 137 104 5 4 . 2 8

Flat benefit for specified se rv ic e ------------------------- 105 77 83 65 20 1 1 8 1 3

Other2--------------------------------------------------------------------------- 30 2 20 1 - - -

10 1

1 S e e fo o t n o t e 1, ta b le 8.

2 Includes plans with fewer than 1,000 workers, for which information was not available.

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

Table 11. Provision for Deduction of Prim ary Social. Security Benefit From Minimum Benefit by Type of

Minimum Benefit Formula in Unfunded Basic' Pension Plans, Spring 1962 1

(Workers in thousands)

Integration provision

Total

Minimum benefit formula based on—

Flat amount varying

by service

Flat amount for

specified service Other

Plans Workers Plans Workers Plans Workers Plans Workers

All plans with a minimum benefit provision----- 279 195 144 116 105 77 2 30 2

No integration provision 2 ------------------------------------ 254 163 130 106 94 55 30 2

Integrated plan s------------------------------------------------------ 25 32 14 9 11 22 - -

All primary social security

benefit deducted---------------------------------------------- 20 21 14 9 6 11 - -

One-half primary social security

benefit deducted--------------------------------------------- 5 11 “ “

5 11 ” “

1 See footnote 1, table 8.

2 Includes plans with fewer than 1,000 workers, for which information was not available.

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

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
T a b le 12. N o r m a l R e t ir e m e n t B e n e fit s P a y a b le b y B a s ic U n fu n ded P e n s io n P la n s to W o r k e r s 

E a rn in g $ 4 ,8 0 0 P e r Y e a r f o r 30 Y e a r s o f F u tu re S e r v i c e , S p rin g 1962

(W o r k e r s in th o u sa n d s )

29

M o n th ly b e n e fit

T o t a l

T y p e o f p la n

R a ilr o a d O th e r

P la n s W o r k e r s 1 P la n s W o r k e r s 1 P la n s W o r k e r s 1

A l l p la n s w ith n o r m a l r e t ir e m e n t 677 462 28 144 649 318

P la n s f o r w h ic h b e n e fit w a s n o t c o m p u t a b le _____ 59 11 _

59 11

P la n s f o r w h ic h b e n e fit w a s c o m p u t e d ____________ 618 451 28 144 590 307

N o b e n e fit p r o v id e d 1 2_________________ __ _____ 48 78 23 71 25 7

$1 an d le s s than $ 2 5 _____________________________ 12 50 2 50 10 ( 3 )

$ 2 5 and le s s than $ 5 0 ___________________________ 99 56 2 21 97 35

$ 5 0 and le s s th an $ 7 5 ___________________________ 187 67 1 3 186 64

$ 7 5 and le s s than $ 1 0 0 __________________________ 82 70 - - 82 70

$ 1 0 0 an d le s s than $ 1 2 5 _____ .__________________ 103 63 - - 103 63

$ 1 2 5 an d le s s than $ 1 5 0 ________________________ 48 61 - - 48 61

$ 1 5 0 and le s s than $ 1 7 5 ________________________ 5 ( 3) - - 5 ( 3)

$ 1 7 5 an d le s s than $ 2 0 0 ________________________ 7 2 - - 7 2

$ 2 0 0 an d le s s than $ 2 2 5 _________________________ 12 2 _ _ 12 2

$ 2 2 5 and le s s than $ 2 5 0 ________________________ 5 1 - - 5 1

$ 2 5 0 an d o v e r __________ __________________________ 10 (3 ) - - 10 (3 )

A v e r a g e m o n th ly b e n e f it 4 ____________________________ $ 64 .4 0 $ 1 0 . 00 $ 8 8 . 90

1 S ee fo o t n o t e 1, ta b le 1.

2 N o p la n b e n e fit w a s p r o v id e d u n d e r a s s u m e d c o n d it io n s b e c a u s e o f th e d e d u c tio n o f p r im a r y s o c ia l s e c u r it y o r r a ilr o a d 

r e t ir e m e n t b e n e fit s . T h e s e p la n s d o , h o w e v e r , p a y b e n e fit s to w o r k e r s e n title d to le s s th an the m a x im u m F e d e r a l b e n e fit .

3 F e w e r than 500 w o r k e r s .

4 W e ig h te d b y n u m b e r o f w o r k e r s c o v e r e d .

N O T E : B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l it e m s m a y n o t e q u a l t o t a ls .

T a b le 13. N o r m a l R e t ir e m e n t B e n e fit s In clu d in g P r im a r y S o c ia l S e c u r it y o r R a ilr o a d R e t ir e m e n t 

B e n e fit , P a y a b le b y U n fu n d ed B a s ic P e n s io n P la n s to W o r k e r s E a rn in g $ 4 ,8 0 0 P e r Y e a r 

fo r 30 Y e a r s o f F u tu re S e r v ic e , S p r in g 1962

(W o r k e r s in th o u sa n d s )

M o n th ly b e n e fit in clu d in g 

s o c ia l s e c u r it y o r r a ilr o a d 

r e t ir e m e n t

T o ta l

T y p e o f p la n

R a ilr o a d O th e r

P la n s W o r k e r s 1 P la n s W o r k e r s 1 P la n s W o r k e r s 1

A l l p la n s w ith n o r m a l r e t ir e m e n t _ _ _ __ 677 4 62 28 144 649 318

P la n s f o r w h ic h b e n e fit w a s n o t c o m p u t a b le ----------- 49 11 _

49 11

P la n s f o r w h ic h b e n e fit w a s co m p u te d 628 451 28 144 600 307

L e s s than $ 1 5 0 ____ __________ _________________ 55 12 _ _ 55 12

$ 1 5 0 an d le s s than $ 1 7 5 __________________________ 97 31 _ _ 97 31

$ 1 7 5 an d le s s than $ 2 0 0 _____ 174 54 _ _ 174 54

$ 2 0 0 and le s s than $ 2 2 5 ________________________ 93 77 _ _ 93 77

$ 2 2 5 an d le s s than $ 2 5 0 __________________________ 104 66 _ _ 104 66

$ 2 5 0 and le s s than $ 2 7 5 ______________________ 73 181 25 120 48 61

$ 2 7 5 and le s s than $ 3 0 0 ___________ __________ 7 22 2 21 5 ( 2 )

$ 3 0 0 and le s s than $ 3 2 5 __________________________ 8 4 1 3 7 2

$ 3 2 5 and le s s th an $ 3 5 0 2 2 _ _ 2 2

$ 3 5 0 an d le s s than $ 4 0 0 ____________________ ___ 5 1 _ _ 5 1

$ 4 0 0 an d le s s than $ 4 5 0 _______________________ 10 ( 2 ) -

10 ( 2)

A v e r a g e m o n th ly b e n e f it 3 $23i0. 10 $ 2 6 1. 00 $ 21 5. 90

1 S e e fo o t n o t e 1, ta b le 1.

2 F e w e r than 500 w o r k e r s .

3 W e ig h te d b y n u m b e r o f w o r k e r s c o v e r e d .

N O T E : B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l it e m s m a y n ot e q u a l t o t a ls .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
30

T a b le 14. P r o v is io n s f o r E a r ly and D is a b ilit y R e t ir e m e n t an d V e s tin g in U n fu n ded B a s ic 

P e n s io n P la n s b y I n d u s tr y , S p r in g 1962

In d u s try

A ll in d u s t r ie s 1 2 3----------------------------------------------------------------

M a n u fa c tu r in g ------------------------------------------------------

D u ra b le g o o d s -----------------------------------------------------------------

S to n e , c la y , and g la s s p r o d u c t s ------------------------

P r im a r y m e t a l in d u s t r i e s ------------------------------------

F a b r ic a t e d m e t a l p r o d u c t s ----------------------------------

O th e r d u r a b le g o o d s 4 5---------------------------------------------

N o n d u ra b le g o o d s ----------------------------------------------------------

F o o d an d k in d r e d p r o d u c t s ----------------------------------

T e x t ile m ill p r o d u c t s ----------------------------------------------

P r in tin g , p u b lis h in g , and a llie d in d u s t r ie s —

C h e m ic a ls and a llie d p r o d u c t s ---------------------------

O th e r n o n d u ra b le g o o d s ----------------------------------------

N o n m a n u fa c tu r in g ----------------------------------------------

R a ilr o a d t r a n s p o r t a t io n ----------------------------------------------

M o t o r t r a n s p o r t a t io n --------------------------------------------------

C o m m u n ic a t io n s -------------------------------------------------------------

U t ilit ie s : E l e c t r i c and g a s ----------------------------------------

W h o le s a le and r e t a il t r a d e ----------------------------------------

F in a n c e , in s u r a n c e , and r e a l e s t a t e ---------------------

O th e r n o n m a n u fa ctu r in g in d u s t r ie s 4----------------------

(W o r k e r s in th o u s a n d s )

T o t a l E a r ly

r e t ir e m e n t

D is a b ilit y

r e t ir e m e n t V e s tin g

P la n s W o r k e r s 1 P la n s W o r k e r s 1 P la n s W o r k e r s 1 P la n s W o r k e r s 1

677 462 358 28 2 432 375 64 57

404 188 224 122 253 147 52 54

136 81 58 57 57 60 25 41

31 6 20 5 20 2 _ -

22 41 3 19 36 21 40 18 34

37 9 1 2 1 2 1 2

46 24 18 14 15 15 6 5

268 107 166 65 196 87 27 12

17 18 5 14 13 14 13 12 7

56 9 35 8 35 7 - -

22 14 1 2 12 12 - -

85 29 78 19 74 24 10 1

88 37 38 22 61 32 5 4

263 274 134 161 179 228 12 3

28 144 22 82 28 144 1 2

30 20 1 2 30 20 - -

25 11 25 11 25 11 - -

51 20 21 19 31 19 - -

21 52 8 37 2 12 - -

46 20 36 9 31 18 1 1

62 7 21 2 32 4 10 (6 )

1 S e e fo o t n o t e 1 ,t a b le 1. E a r ly and d is a b ilit y r e t ir e m e n t b e n e fit s a r e a ls o p r o v id e d b y s u p p le m e n t a r y u n fu n d e d p e n s io n p la n s .

2 I n c lu d e s p la n s c o v e r in g fi r m s o p e r a t in g in b o th m a n u fa c tu r in g and n o n m a n u fa ctu r in g in d u s t r ie s n ot sh o w n s e p a r a t e ly b e lo w .

3 I n c lu d e s 4 p la n s , c o v e r in g 28, 000 w o r k e r s , th at a ls o p r o v id e d " s p e c i a l " e a r ly r e t ir e m e n t .

4 In c lu d e s in te r in d u s t r y .

5 In c lu d e s p la n s c o v e r in g 5 ,0 0 0 w o r k e r s that a ls o p r o v id e d " s p e c i a l " e a r ly r e t ir e m e n t .

6 F e w e r th a n 500 w o r k e r s .

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l it e m s m a y n ot e q u a l t o t a ls .

T a b le \b. M in im u m A g e an d S e r v ic e R e q u ir e m e n t s fo r E a r ly R e t ir e m e n t in U n fu n ded B a s ic P e n s io n P la n s , S p r in g 1962 1

i£\^rke£s- ir^thousa^dsj>

M in im u m s e r v i c e r e q u ir e m e n t 2

T o ta l

M in im u m a g e r e q u i r e m e n t '3

N o a g e 

r e q u ir e m e n t

A g e 50 A g e 55 A g e 60 A g e 65

P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s

A ll p la n s p r o v id in g f o r e a r ly

r e t ir e m e n t _ --------- ---------------------- — 358 282 49 12 4 8 49 55 252 198 4 10

N o s e r v i c e r e q u ir e m e n t___ ___________ ____ 29 12 20 2

_ _ _ _ 9 11 _ _

3 y e a r s ------- -------------------- — ----- ----- - 1 3 - - - - - - 1 3 - -

5 y e a r s . _ __ ____ _____________________ _ 10 4 - - - - - - 10 4 - -

7 y e a r s __ ---------------- ------- ---------- 10 2 - - - - - - 10 2 - -

10 y e a r s __ _ ---- -------- ----- 55 23 - - - - 15 6 39 16 1 1

15 y e a r s ____________ _ -------- ----------- ----- 72 70 22 8 - - 9 34 41 28 - -

20 y e a r s _____ ______ _ _____ _ _ 72 39 6 1 4 8 23 12 37 10 2 7

25 y e a r s __________ __________________________ ____ 56 15 - - - - 1 (4 ) 54 13 5 1 2

30 y e a r s __________ __ __ — ___________ 53 113 1 1 1 2 51 110 " "

1 S e e fo o t n o t e 1, ta b le 8.

2 F o r th o s e p la n s w h ic h s p e c i fie d that a p e r io d o f e m p lo y m e n t b e s e r v e d b e f o r e p a r t ic ip a t io n in th e p la n c o u ld b e g in , 

the m in im u m s e r v i c e r e q u ir e m e n t in c lu d e s the p r e p a r t ic ip a t io n s e r v i c e an d the r e q u ir e d p la n m e m b e r s h ip s e r v i c e .

3 In 23 p la n s , c o v e r in g 3 0, 000 w o r k e r s , a lt e r n a t iv e r e q u ir e m e n t s w e r e s p e c i fie d ; th e a lt e r n a t iv e w ith the e a r li e s t a g e 

r e q u ir e m e n t at th e w o r k e r 's o p tio n is sh o w n , o r the e a r li e s t a g e o r n o a g e r e q u ir e m e n t is u s e d i f n o w o r k e r o p tio n w a s p e r ­

m it t e d . In 19 p la n s , c o v e r in g 17, 000 w o r k e r s , a g e r e q u ir e m e n t s w e r e 5 y e a r s lo w e r f o r w o m e n .

4 F e w e r than 500 w o r k e r s .

5 P la n s p e c i fie d a g e 6 2.

N O T E : B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l it e m s m a y n o t e q u a l t o t a ls .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
31

T a b le 16. M in im u m A g e an d S e r v ic e R e q u ir e m e n t s f o r D is a b ilit y R e t ir e m e n t in U n fu n ded B a s ic P e n s io n P la n s , S p rin g 1962 1

(W o r k e r s in th o u sa n d s )

M in im u m s e r v i c e 

r e q u ir e m e n t 1 2

T o ta l

M in im u m a g e r e q u ir e m e n t 3

In fo r m a tio n 

N o a g e n ot a v a ila b le

r e q u ir e m e n t A g e 45 A g;e 50 A g e 55 A g e 60

P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s

A ll p la n s w ith d is a b ilit y

r e t ir e m e n t ______ _____ 4 432 375 339 323 3 8 53 34 22 7 5 3 10 1

N o s e r v i c e r e q u ir e m e n t__ 29 30 29 30 . . _ _ . . .

10 y e a r s ______________________ 71 36 5 44 26 6 1 1 11 4 10 2 5 3 _ _

15 y e a r s ______________________ 197 115 154 101 - - 33 14 10 (7 ) - - - -

20 y e a r s ________ _____ ___ 67 66 56 43 8 2 6 8 13 1 3 _ _ _ _

25 y e a r s _________________ 54 70 52 66 - - 1 3 9 1 1 - - _ _

30 y e a r s ---------- __ _____ 4 57 4 57 - - - - - - - - _ _

In fo r m a tio n n ot

a v a ila b le _________________ 10 1 " “ “ - - " - - - 10 1

1 S ee fo o t n o t e 1, ta b le 8.

2 F o r t h o s e p la n s w h ic h s p e c i fie d that a p e r io d o f e m p lo y m e n t b e s e r v e d b e f o r e p a r t ic ip a t io n in the p la n c o u ld b e g in , 

the m in im u m s e r v i c e r e q u ir e m e n t in c lu d e s th e p r e p a r t ic ip a t io n s e r v i c e an d the r e q u ir e d p la n m e m b e r s h ip s e r v i c e . T h e s e r v ­

ic e r e q u ir e m e n t w a s 5 y e a r s lo w e r f o r w o m e n in 4 p la n s that c o v e r e d 7 , 000 w o r k e r s .

3 In 17 p la n s , c o v e r in g 2 4, 000 w o r k e r s , a lt e r n a t iv e r e q u ir e m e n t s w e r e s p e c i fie d ; the o n e w ith the e a r li e s t a g e r e q u i r e ­

m e n t at th e w o r k e r 's o p tio n is sh o w n , o r th e e a r li e s t a g e o r n o a g e r e q u ir e m e n t is u s e d i f n o w o r k e r o p tio n w a s p e r m it t e d .

In clu d e s 7 p la n s , c o v e r in g 13, 000 w o r k e r s , th at d iffe r e n t ia t e d b e tw e e n n o n o c c u p a t io n a l an d o c c u p a t io n a l d is a b ilit y 

b e n e fit r e q u ir e m e n t s .

5 In clu d e s 1 p la n w ith 17, 000 w o r k e r s th at r e q u ir e d I 2 V2 y e a r s o f s e r v i c e .

6 P la n s p e c i fie d a g e 30 f o r p a r t ic ip a t io n .

7 F e w e r than 500 w o r k e r s .

8 In clu d e s 1 p la n w ith 1, 000 w o r k e r s th at s p e c i fie d a g e 40 f o r p a r t ic ip a t io n .

9 P la n s p e c i fie d a g e 56.

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l it e m s m a y n o t e q u a l t o t a ls .

T a b le 17. D is a b ilit y R e t ir e m e n t B e n e fit s P a y a b le b y U n fu n ded P e n s io n P la n s to W o r k e r s 

R e t ir in g at A g e 50 an d E a rn in g $ 4 , 800 P e r Y e a r fo r 20 Y e a r s o f F u tu re S e r v ic e 

b y T y p e o f P la n , S p rin g 1962 1

(W o r k e r s in th o u sa n d s )

M o n th ly b e n e fit

A ll p la n s

B a s ic p la n S u p p le m e n ta ry

p la n 2 T o t a l R a ilr o a d O th e r

P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s

A ll p la n s w ith d is a b ilit y r e t i r e m e n t------------------------ 505 1, 127 432 375 28 144 404 231 73 752

P la n s f o r w h ic h b e n e fit w a s n ot

c o m p u t a b le --------------------------------------------------------------------- 216 245 195 165 22 109 173 57 21 80

P la n s f o r w h ic h b e n e fit w a s c o m p u t e d ------------------ 289 882 237 210 6 36 231 174 52 672

No b e n e fit p r o v id e d 3 ---------------------------------------------- 10 45 4 15 4 15 - - 6 30

$ 1 and le s s than $ 2 0 --------------------------------------------- 2 10 1 5 - - 1 5 1 5

$ 20 an d le s s than $ 3 0 -------------------------------------------- 46 559 23 28 2 20 21 8 23 531

$ 30 an d le s s th a n $ 4 0 -------------------------------------------- 39 31 28 18 - - 28 18 11 13

$ 4 0 an d le s s th an $ 5 0 -------------------------------------------- 23 12 21 10 - - 21 10 2 2

$ 50 an d le s s th an $ 6 0 -------------------------------------------- 53 7 4 47 52 - - 47 52 6 22

$ 60 an d le s s th an $ 7 0 -------------------------------------------- 14 14 13 12 - - 13 12 1 3

$ 7 0 and. le s s th an $ 8 0 -------------------------------------------- 1 8 1 8 - - 1 8 - -

$ 80 an d le s s th an $ 9 0 -------------------------------------------- 48 78 47 20 - - 47 20 1 58

$ 90 an d le s s than $ 100------------------------------------------ 22 13 22 13 - - 22 13 - -

$ 100 an d le s s th an $ 1 1 0 _______________ ,— ------- _ 12 20 12 20 - - 12 20 - -

$ 1 1 0 an d le s s than $ 1 3 0 --------------------------------------- 16 3 16 3 - - 16 3 - -

$ 1 3 0 an d le s s than $ 1 4 0 --------------------------------------- 1 3 1 3 - - 1 3 - -

$ 140 an d o v e r ------------------------------------------------------------ 2 10 1 1 - -

1 1 1 8

A v e r a g e m o n th ly b e n e f it 4 ------------------------------------------ $

________ 1

3 6 .0 0 $ 5 6 . 40 $ :14. 20 $ 6 5 . 10

r

$ ;2 9 .7 0

1

1 B a s e d o n a stu d y o f 851 u n fu n ded p e n s io n p la n s , in clu d in g 677 b a s ic p la n s , c o v e r in g a p p r o x im a te ly 4 6 2 ,0 0 0 a c t iv e 

and r e t ir e d w o r k e r s in I9 6 0 , and 174 s u p p le m e n ta r y p la n s , c o v e r in g a p p r o x im a te ly 9 0 4 ,0 0 0 a c t iv e and r e t ir e d w o r k e r s in I9 6 0 .

2 In clu d e s n o n r a ilr o a d p la n s o n ly ; n o s u p p le m e n ta r y p la n s w e r e r e p o r t e d b y e m p lo y e r s w h o a r e u n d e r the R a ilr o a d R e ­

t ir e m e n t A c t .

3 N o p la n b e n e fit w a s p r o v id e d u n d e r a s s u m e d c o n d it io n s b e c a u s e o f the d e d u c tio n o f s o c ia l s e c u r it y o r r a ilr o a d r e t i r e ­

m e n t d is a b ilit y b e n e fit . T h e s e p la n s d o , h o w e v e r , p a y b e n e fit s to w o r k e r s e n title d to le s s than the F e d e r a l b e n e fit p a y a b le 

u n d e r the a s s u m e d c o n d it io n s .

4 W e ig h te d b y n u m b e r o f w o r k e r s c o v e r e d .

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l it e m s m a y n ot e q u a l t o t a ls .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
32

T a b le 18. D is a b ilit y R e t ir e m e n t B e n e fit s , In clu d in g S o c ia l S e c u r it y o r R a ilr o a d R e t ir e m e n t D is a b ilit y 

B e n e fit , P a y a b le to W o r k e r s R e t ir in g at A g e 50 an d E a rn in g $ 4 ,8 0 0 P e r Y e a r f o r 20 Y e a r s o f 

F u tu re S e r v ic e U n d e r U n fu n ded P e n s io n P la n s , b y T y p e o f P la n , S p rin g 1962 1

(W o r k e r s in th o u sa n d s )

M o n th ly b e n e fit

A ll p la n s

B a s ic p la n S u p p le m e n ta r y 

p la n 2 T o t a l R a ilr o a d O th e r

P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s

A l l p la n s w ith a d is a b ilit y r e t ir e m e n t

p r o v is i o n _____________________________________________ 505 1, 127 432 375 28 144 4 04 231 73 752

P la n s f o r w h ic h b e n e fit w a s n ot

c o m p u t a b le -_________________________________ ______ ___ 216 245 195 165 22 109 173 57 21 80

P la n s f o r w h ic h b e n e fit w a s c o m p u t e d — ________ 289 882 237 210 6 36 231 174 52 6 72

L e s s than $ 1 4 0 _____________________________________ 6 30 - - - - - - 6 30

$ 140 an d le s s th an $ 1 5 0 --------------------------------------- 40 5 37 17 9 - - 17 9 23 528

$ 150 an d le s s th an $ 1 6 0 --------------------------------------- 19 28 8 16 - -■ 8 16 11 12

$ 160 and le s s th a n $ 1 7 0 --------------------------------------- 47 38 45 27 4 15 41 12 2 11

$ 170 and le s s th an $ 1 8 0 ----------------------- ------------- 48 55 42 37 - - 42 37 6 18

$ 180 and le s s th an $ 1 9 0 --------------------------------------- 13 26 12 20 1 1 11 20 1 5

$ 190 and l e s s than $ 2 0 0 --------------------------------------- 14 33 13 30 1 20 12 11 1 2

$ 200 and le s s th an $ 2 1 0 --------------------------------------- 37 24 37 24 - - 37 24 - 1

$ 2 1 0 and le s s th an $ 2 2 0 --------------------------------------- 24 75 23 17 - - 23 17 1 58

$ 220 and le s s th an $ 235 --------------------------------------- 22 21 22 21 - - 22 21 - -

$ 2 3 5 an d l e s s th an $ 2 5 0 --------------------------------------- 16 3 16 3 - - 16 3 - -

$ 250 an d l e s s th an $ 265 --------------------------------------- 1 3 1 3 - - 1 3 - _

$ 265 and o v e r — ________________________ _________ 2 10 1 1 “ - 1 1 1 ’ 8

A v e r a g e m o n th ly b e n e fit 3 ------------------------------------------ $ •164. 70 $ :1 9 0 .2 0 $ ].8 1 .2 0 $ 1 9 2 . 10 $ 1 5 6 .7 0

1 S ee fo o t n o t e 1, ta b le 17.

2 S ee fo o t n o t e 2, ta b le 17.

3 W e ig h te d b y n u m b e r o f w o r k e r s c o v e r e d .

N O T E : B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l it e m s m a y n ot e q u a l t o t a ls . 12345

T a b le 19. M in im u m A g e and S e r v ic e R e q u ir e m e n t s f o r V e s tin g 

in U n fu n d ed B a s ic P e n s io n P la n s , S p rin g 1962 1

(W o r k e r s in th o u sa n d s )

M in im u m s e r v i c e r e q u i r e m e n t 2

T o t a l

M in im u m a ge r e q u ir e m e n t

N o a ge r e q u ir e m e n t A g e 40 A g e 55

P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s

A ll p la n s w ith v e s t i n g _______________ 64 57 15 5 33 31 16 21

10 y e a r s o f s e r v i c e __ ______________ 11 11 5 4 36 7

11 y e a r s o f s e r v i c e __________________ 1 1 - - 4 1 1 _ _

15 y e a r s o f s e r v i c e __________________ 37 25 10 1 26 23 S 1 1

20 y e a r s o f s e r v i c e 4 15 - - - - 4 15

25 y e a r s o f s e r v i c e __________________ 11 5 11 5

1 S ee fo o t n o t e 1, ta b le 8.

2 F o r t h o s e p la n s w h ic h s p e c i fie d th at a p e r io d o f e m p lo y m e n t b e s e r v e d b e f o r e p a r t ic ip a t io n in th e p la n c o u ld b e g in , 

the m in im u m s e r v i c e r e q u ir e m e n t in c lu d e s the p r e p a r t ic ip a t io n s e r v i c e and th e r e q u ir e d p la n m e m b e r s h ip s e r v i c e .

3 In clu d e s 1 p la n w ith 2 ,4 0 0 w o r k e r s th at s p e c ifie d a g e 4 5 .

4 P la n p a r t ic ip a t io n a g e 30.

5 P la n s p e c i fie d a g e 5 0.

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l it e m s m a y n o t e q u a l t o t a ls .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
33

T a b le 2 0. T y p e o f D e a th B e n e fit P r o v id e d b y U n fu n ded B a s ic P e n s io n P la n s , b y I n d u s tr y , S p r in g 1962 1

(W o r k e r s in th o u sa n d s )

In d u s try

T o ta l

T y p e o f d ea th b e n e fit

L u m p su m P a y m e n t c e r t a in W id o w 's i b e n e fit

P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s

A ll in d u s t r ie s ---------- _ -------- _ 116 88 51 60 54 18 11 10

M a n u fa ctu r in g - __ — 77 36 23 18 54 18 _ _

D u ra b le g o o d s - -------------------- — 28 18 7 10 21 8 - -

F a b r ic a t e d m e t a l p r o d u c t s ---------- 1 2 - - 1 2 - -

E l e c t r i c a l e q u ip m e n t and

s u p p lie s _ — ------- — 2 5 2 5 - - - -

T r a n s p o r t a t io n e q u ip m e n t — 15 9 5 4 10 4 - -

O th e r d u r a b le g o o d s _______________ 10 2 - - 10 2 - -

N o n d u ra b le g o o d s _ ---------- 49 18 16 8 33 10 - -

C h e m ic a ls and a llie d p r o d u c t s — 1 2 - - 1 2 - -

P e t r o le u m re fin in g and

r e la t e d in d u s t r ie s — ----------- 10 ( 1 2 ) 10 (2 ) - - - -

O th e r n o n d u ra b le g o o d s __________ 38 15 6 8 32 7 7 '

N o n m a n u fa c tu rin g — _ 39 53 28 43 _ - 11 10

R a ilr o a d t r a n s p o r t a t io n _ _ _ ----- 6 10 _ - - - 6 10

C o m m u n ic a t io n s ________________________ 15 10 15 10 - - - -

W h o le s a le and r e t a il t r a d e ---------------- 1 29 1 29 - - - -

F in a n c e , in s u r a n c e , an d r e a l

e s t a t e „ ------------- ------- — — 6 1 1 1 - - 5 (2 )

O th e r n o n m a n u fa ctu r in g

in d u s t r ie s ----- ------- ---------------- 11 3 11 3

1 S e e fo o tn o te 1, ta b le 8.

2 F e w e r than 500 w o r k e r s .

N O T E : B e c a u s e o f ro u n d in g , su m s o f in d iv id u a l it e m s m a y n ot e q u a l t o t a ls .

T a b le 2 1. T y p e s o f B e n e fit P r o v is io n s in U n fu n ded S u p p le m e n ta ry P e n s io n P la n s b y In d u s try , S p rin g 1962

(W o r k e r s in th o u sa n d s )

T y p e o f b e n e fit

In d u s try

T o ta l D is a b ilit y

r e t ir e m e n t

D eath

b e n e fit

M in im u m

g u a r a n te e

S o c ia l s e ­

c u r it y 

a d ju s tm e n t 

a llo w a n c e

S u p p le m e n ­

ta l b e n e fit 

(n o t a 

m in im u m )

P a s t

s e r v i c e O th e r

P la n s W o rk -

i

e r s

P la n s W ork ­

e r s 1 P la n s W o rk ­

e r s 1 P la n s W ork ­e r s 1 P la n s W ork ­e r s 1 P la n s W orke r s 1 P la n s W o rk ­e r s 1 P la n s W ork - 

e r s 1

A l l in d u s t r ie s ______ __________________ 174 904 73 752 34 603 29 93 13 49 42 48 20 35 8 77

M a n u fa ctu r in g ___________________ 92 226 47 173 9 50 17 51 1 1 19 31 12 20 5 65

D u ra b le g o o d s ___________________________ 32 54 25 42 6 6 2 5 - _ 5 9 1 1 4 7

P r i m a r y m e t a ls in d u s t r ie s ______ 9 17 8 16 5 3 - - - - 1 2 - - 1 1

F a b r ic a t e d m e t a l p r o d u c t s ---------- 12 9 11 7 - - . 1 1 - - 1 1 - - - -

O th e r d u r a b le g o o d s _______________ 11 28 6 19 1 3 ' 1 3 - - 3 6 1 1 3 6

N o n d u ra b le g o o d s ______________________ 60 172 22 132 3 44 15 46 1 1 14 22 11 19 1 58

C h e m ic a ls a n d a ll ie d p r o d u c t s __ 5 82 3 70 1 7 2 12 - - 2 11 - - 1 58

P e t r o le u m r e fin in g and

r e la t e d in d u s t r ie s ------------------------- 25 60 1 35 1 35 11 13 1 1 2 10 10 1 - -

O th e r n o n d u ra b le g o o d s ________ 30 31 18 27 1 1 2 21 - - 10 1 1 18 - -

N o n m a n u f a c tu r i n g _____________ 81 642 26 578 25 553 12 42 11 11 23 16 8 14 3 12

M o t o r t r a n s p o r t a t io n __________________ 1 3 1 3

_ _ _ _ _ _ _ _ 1 3 1 3

18 520 18 520 18 520

U t ilit ie s : E l e c t r i c an d g a s __________ 2 22 70 5 48 1 28 6 15 _ _ 12 6 2 11 1 8

W h o le s a le an d r e t a il t r a d e __________ 2 30 1 5 1 5 1 25 _ - _ _ _ _ _ _

F in a n c e , in s u r a n c e , a n d r e a l

e s t a t e ___________________________________ 27 8 1 2 5 ( 3 ) 5 2 - - 10 2 5 1 1 1

O th e r n o n m a n u fa ctu r in g

i n d u s t r ie s ______________________________ 11 11 - - - - - 11 11 1 8 - - - -

I n t e r in d u s t r y _______________ _ 1 37

_ _ _ _ _ _ 1 37 _ _ _ _ _ _

1 S e e fo o t n o t e 1, ta b le 1.

2 In clu d e s 1 p la n , c o v e r in g 2 8 ,0 0 0 w o r k e r s , th at a ls o co n ta in e d an e a r ly r e t ir e m e n t p r o v is i o n .

3 F e w e r than 500 w o r k e r s .

N O T E : B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l it e m s m a y n ot e q u a l t o t a ls .

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
34

T a b le 22. M in im u m A g e an d S e r v ic e R e q u ir e m e n t s f o r D is a b ilit y R e t ir e m e n t 

in U n fu n ded S u p p le m e n ta ry P e n s io n P la n s , S p r in g 1962 1

(W o r k e r s in th o u sa n d s )

M in im u m s e r v i c e r e q u i r e m e n t 2

T o t a l

M in im u m a g e r e q u ir e m e n t 3

N o age 

r e q u ir e m e n t A g e 45 A g e 50 A g e 55

P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s P la n s W o r k e r s

A l l p la n s w ith d is a b ilit y r e t i r e m e n t-------- 4 7 3 752 67 691 1 28 4 29 1 4

N o s e r v i c e r e q u i r e m e n t _______ _____ — 14 56 5 14 56 _ _ _ _ _ .

10 y e a r s ------------------------------------------------------------- 3 20 3 20 - - - - -

15 y e a r s ________________________________________ 42 636 6 39 611 - - 2 22 1 4

20 y e a r s ------------------------------------------------------------ 13 11 11 4 - - 2 7 - -

30 y e a r s ------------------------------------------------------------- 1 28 - “ 7 1 28 " - -

1 B a s e d on a stu d y o f 1 7 4 u n fu n d e d s u p p le m e n ta r y p e n s io n p la n s , c o v e r in g a p p r o x im a te ly 9 0 4 ,0 0 0 a c t iv e an d r e t i r e d w o r k e r s 

in I9 6 0 .

2 F o r th o s e p la n s w h ic h s p e c i fie d th at a p e r io d o f e m p lo y m e n t b e s e r v e d b e f o r e p a r t ic ip a t io n in the p la n c o u ld b e g in , the 

m in im u m s e r v i c e r e q u ir e m e n t in c lu d e s the p r e p a r t ic ip a t io n s e r v i c e an d th e r e q u ir e d p la n m e m b e r s h ip s e r v i c e . T h e s e r v i c e 

r e q u ir e m e n t w a s 3 y e a r s g r e a t e r f o r w o m e n in 1 p la n that c o v e r e d 28, 000 w o r k e r s .

3 In 21 p la n s , c o v e r in g 6 1 ,0 0 0 w o r k e r s , a lt e r n a t iv e r e q u ir e m e n t s w e r e s p e c i fie d ; the o n e w ith th e e a r li e s t a g e r e q u ir e m e n t 

at th e w o rk e r * s o p tio n is sh o w n , o r th e e a r li e s t a ge o r n o a g e r e q u ir e m e n t is u s e d if n o w o r k e r o p tio n w a s p e r m it t e d .

• 4 I n clu d e s 9 p la n s , c o v e r in g 28, 000 w o r k e r s , that d iffe r e n t ia t e d b e tw e e n n o n o c c u p a t io n a l and o c c u p a t io n a l d is a b ilit y 

r e q u ir e m e n t s .

5 I n clu d e s 1 p la n w ith 7 ,0 0 0 w o r k e r s th at r e q u ir e d 2 y e a r s o f s e r v i c e .

6 I n clu d e s 1 p la n w ith 2, 000 w o r k e r s th at r e q u ir e d 16 y e a r s o f s e r v i c e .

7 P la n p r o v id e d that a g e p lu s s e r v i c e m u s t e q u a l 75, w ith in it ia l m in im u m s o f a g e 45 an d 8 y e a r s o f s e r v i c e .

N O T E : B e c a u s e o f ro u n d in g , s u m s o f in d iv id u a l it e m s m a y n ot e q u a l t o t a ls .

☆ U. S. GOVERNMENT PRINTING OFFICE : 1964 O - 729-806

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
ulletin

umber

1284

1307

1326

1334

1373

1250

1274

1280

1293

1296

1330

1377

1325

1365

R ecen t BLS Publications on Em ployee Benefit Plans

Pensions

Pension Plans Under Collective Bargaining: Normal Retirement, Early 

and Disability Retirement, Fall 1959.

Digest of One-Hundred Selected Pension Plans Under C ollective Bargaining, 

Spring 1961.

Multiemployer Pension Plans Under Collective Bargaining, Spring 1960.

Pension Plans Under C ollective Bargaining: Benefits for Survivors,

Winter 1960-61.

Digest of 50 Selected Pension Plans for Salaried Employees, Spring 1963.

Recent Changes in Negotiated Pension Plans. Monthly Labor Review,

May 1962. (Reprint 2392. )

Preliminary Release: Prevalence of Multiemployer Pension Plans Under 

C ollective Bargaining, Spring 1960. (February 1961. )

Health and Insurance

Health and Insurance Plans Under C ollective Bargaining: Accident and 

Sickness Benefits, Fall 1958.

Health and Insurance Plans Under C ollective Bargaining: Hospital Benefits, 

Early 1959.

Health and Insurance Plans Under C ollective Bargaining: Surgical and 

Medical Benefits, Late Summer 1959.

Health and Insurance Plans Under Collective Bargaining: Major M edical 

Benefits, Fall 1960.

Health and Insurance Plans Under Collective Bargaining: Life Insurance 

and Accidental Death and Dismemberment Benefits, Early Summer 1960.

Digest of One Hundred Selected Health and Insurance Plans Under 

Collective Bargaining, Winter 1961-62.

Digest of 50 Selected Health and Insurance Plans for Salaried Employees, 

Spring 1963.

Recent Changes in Negotiated Health and Insurance Plans, Monthly Labor 

Review, September 1962. (Reprint 2402. )

Other

Digest of Profit-Sharing, Savings, and Stock Purchase Plans, 

Winter 1961-62. (20 Selected Plans. )

Digest of Nine Supplemental Unemployment Benefit Plans, Early 1963.

Health, Insurance, and Pension Plan Coverage in Union Contracts,

Late 1960. BLS Report 228.

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis