Evening star., 1949-12-11

such familiar issues as how mucl
a worker brings home on payday
or how many hours he works, bu
over @ relatively new element II
labor-management relations, some
thing that goes under the name
of security" and Is expressed II
terms of pensions for retired
workers.
Beyond that. there is implicit II
the settlement the concept tha'
the Federal Government has ths
major responsibility to meet thu
depreciation Of worker" obliga'
ton.
Terms May Be Frozen
The extent Of how terms OF the
steel settlement give meaning tx
that concept probably has moi
been fully told or understood
The steel industry agreed to pen
sions of at least 500 a month
for employees retiring at IS aftel
IS years service. these pensions
to be paid for solely by the COM
panies except to the extent thai
they include social security bene.
Ats for which employers and EN-.
ployes are taxed equally.
Contract terms on pensions may
be frozen at the 500 level. II the
companies should elect that op-
ton. for five years. AS Of now the
major portion Of the pension. fol-
currently retiring steel workers
will be paid for by the companies.
Their share will be reduced, how
ever, as workers earn additional
social security credits and fur
ther reduction would occur If. as
seems likely. the Senate passes the
bill already approved by the
House that increase social Sc
curity old-age benefits an aver
age of 10 per cent.
Younger workers. whose retire.
ment Is years away, might find
their pensions wholly, or nearly so,
met by social security. and In
the case Of Henry j. Kaiser's
warborn Fontana Steel Corp, 1t
will be many years before any en-
ploye has accumulated the rs
years of service required for nor
NAL pension at the age Of IS. so
that as of now there isn't any
week-to-week or month-to-mo-i1h
pension cost for Fontana.
This Is true because pensions
are not funded" by impollndlng
something each payday to meet
future pension costs. What hap
pens Is that when a worker reaches
IS, has accumulated Is years
of service, and decides to retire,
a fund is set up through a single
payment; or in the case OF some
contracts. through payments over
the first five years of retirement,
to guarantee payment of the pen
sion.
Cost Indefinite
The amount of that fund is not
spelled out in the contracts,
which provide only that it must
be "actuarily sound" Initial de-
termination of what is "actuarily
sound" is to be made by the COM
pany but its decision is subject to
review by a pension committee on
which representatives Of manage
ment and of the CIO United Steel
Workers have equal representa-
ton. The unions consulting actu-
airy figures 1t will take a fund OF
about $4,000 to guarantee pay
ment of a pension for the IL to 13
year life expectancy Of a steel
worker retiring at IS. That would
be reduced, Of course, to the ex-
tent the worker has earned social
security benefits.
These are some Of the reasons
why it isn't possible to say def
nitely what the pension cost means
in terms OF cents per hour to pay
rolls. That will vary from COM
pany to company. In the case OF
the Bethlehem Steel Corp, which
broke the ice and made an agree
ment that can be regarded as
ending the month-long strike. the
union president made the rough
guess that it meant 10 to IL cents
an hour.
In addition, the union gained
insurance benefits that are to cost
5 cents an hour, with companies
and union members sharing that
cost equally.
Terms of the strike settlement
have come to be known as "the
Bethlehem formula" It was the
Bethlehem company, second larg-
est producer that took the in
itiative in breaking the month
long deadlock. How it happened
that Bethlehem took the lead-a
role traditionally reserved for
United States Steel Corp, the
largest producer with one-third OF
all steel production capacity-is
almost a story in itself.
One factor that made it easy
for Bethlehem, rather than United
States Steel, to take the lead was
that Bethlehem already had non
contributory pension plan which
was by prestrike standards rela-
lively generous. The union fig
ured the Bethlehem prestrike plan
produced for its members about
$36 a month, although the COM
pany-wide average was higher
The important thing, however, was
that Bethlehem's plan was mon
contributory" and the big stum-
bling block in strike settlement
negotiations was industry insist
snce that any pension plan should
be "contributory" with employees
sharing the cost.
Murray-Stephens Feud
But the largest factor in oust-
ing United States Steel from its
pace-setting role came down to
an issue of personalities bitter