Evening star., 1949-09-25

age benefits to employees covered
by the Federal social security
laws, under which employers and
employees pay equal amounts to
the Government which distrib-
utes the pensions.
The board left open to collec-
tive bargaining, after full study,
the following questions: Q)
Whether the extra Government
benefits should be uniform, fiat
amounts or should vary with the
employees years Of service and
current rate of earnings; ca
whether there should be mini
mum number Of years for
worker to qualify for a pension,
and 90 what the minimum
should be.
The merits and demerits Of con-
tributory versus non-contributory
plans were argued at length at the
boards hearings in New York with
spokesmen for the steel workers
presenting the case. usually upheld
by other unions, in favor Of the
employer alone paying the PEN
sion costs, and the steel manage
ment spokesman insisting, like
many other employers. on employe
contributions.
In accepting the unions argu-
ment on this point. the board esti-
mated that by company payments
of 6 cents an hour or $120 a year
the fiat sum of $40 a month could
be given all workers who reached
the age of IS. Added to the aver
age amount now payable under
social security laws, this would
provide a little more than $100 q
month on retirement.
Fact.Finders' Reasoning
The board said that it favored
the non-contributory system for
these reasons:
l. The general trend is in this
direction. The Bureau of Internal
Revenue; which passes on pension
plans for tax purposes, reported
that through August, 1916, a ma
jority of the pension and profit
sharing plans covering 3,290,6
lemployes were in the non-contrib-
utory class. A similar study by the
Bankers Trust Co., in 1948. found
that while there were more con-
1tributory than -contributory
plans, 67.8 per cent of all employees
covered were in plans for which
il the employer paid the whole costs.
The contributory plans predomi-
mated in plants with smaller num-
bers of employees.
2. Non-contributory plans cover
all workers in a plant instead of
letting individual employees elect
to remain out of the plan so that
they would not forgo any part of
their current spendable income.
3. There would be no reduction
in take-home pay of workers.
4. Stability would be promoted
because costs could be better in
tegrated into the labor cost struc-
ture.
5. Under tax laws more insur-
ance could be bought for a given
number of dollars-because the
company charges it to untaxed op-
Grating expenSes-than If the en-
ploye contributed from his own
earnings after he had paid a tax
on those earnings himself.
During the New York hearings,
President Philip Murray of the,
steel workers testified that in
l946 when the Inland Steel Co.
established contributory plan,
AZ per cent of the 1900 persons
eligible elected to stay out. They
were, he said, mostly young men
who thought they would be pay
ing most of the pensions for older
workers.
Companies Stick Together
In opposing the boards recon-
mendation on pensions, Benjamin
F.. Fairless, president of the
United States Steel Corp, called
it "a revolutionary doctrine Of
far-reaching and serious conse-
quences."
Although some steel companies,
including Jones & Laughlin,
have had n-contributory pen
sions for many years, the COM
panieS stuck together in opposing
the unions proposal that the en-
ployer pay all. They were agreed
on the following arguments in IA
vor of joint payments:
/. Contributory plans conform
with existing social security laws,
originally adopted in. 1885, which
now provide for per cent pay
ment each by employers and en-
ployes on wages up to $4,000 a
year. Last month, the House
Ways and Means Committee, re-
porting favorably on liberalizing
these laws, said:
"The time has come to re-
affirm the basic principle that a
contributory system of social in
surance in which workers share
directly in meeting the cost Of
protection afforded is the most
satisfactory way of preventing de-
pendency. A contributory system,
in which both the contributions
and benefits are directly related
to the individuals own productive
efforts prevents insecurity while
preserving self-reliance and. initia-
tive"
The Railroad Retirement Act,
covering about 100000 wage
earners. and the Federal workers
retirement plans both provide for
contributions by employees.
2. Joint contributions assure
better long-range security for
workers. because they are based
on common consent and are less
likely to be discontinued for
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