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INSTITUTE OF LABOR AND INDUSTRIAL RELATIONS

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Employment Act of 1946

FOR STATEMENT OF NUMBERING OF ISSUES SEE ISSUE NUMBER 24 ENTITLED "MOTION AND Tl^yffi STUDY,"

J L L E T I N

PUBLICATIONS SERIES A, VOL. 1, NO. 1, APRIL 1947

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INSTITUTE OF

LABOR AND INDUSTRIAL RELATIONS

Pension Plans

In Collective Bargaining

N I V E R

O I S

EDITORIAL NOTE

The Institute of Labor and Industrial Relations was established in 1946 to "inquire faithfully, honestly, and impartially into labor- management problems of all types, and secure the facts which will lay the foundation for future progress in the whole field of labor relations."

The Institute seeks to serve all the people of Illinois by promot- ing general understanding of our social and economic problems and by providing specific services to groups directly concerned with labor and industrial relations.

The Bulletin series is designed to implement these aims by periodically presenting information and ideas on subjects of inter- est to persons active in the field of labor and industrial relations. While no efi:ort is made to treat the topics exhaustively, an attempt is made to answer the main questions raised about the subjects under discussion. The presentation is non-technical for general and popular use.

Additional copies of this Bulletin and others listed on the last page are available for distribution.

W. Ellison Chalmers Milton Berber

Acting Director Coordinator of Research

Dorothy Dowell

Editor

I.L.I. R. PUBLICATIONS, SERIES A, VOL. 3, NO. 6

UNIVERSITY OF ILLINOIS BULLETIN

Volume 47, Number 40; January, 1950. Published seven times each month by the Univer- sity of Illinois. Entered as second-class matter December 11, 1912, at the post office at Urbana, Illinois, under the Act of August 24, 1912. Office of Publication, 358 Administration Building, Urbana, Illinois.

PENSION PLANS IN COLLECTIVE BARGAINING

By Louis S. Boffo

COLLECTIVE BARGAINING negotiations were much in the newspapers this fall. Headlines reported: Harvester asks Unions to Share M^ el- fare Costs;^ Steel Union Submits Figures to Back Claims Retired Workers Can't Live on Present Pensions f Leivis Recalls 102,000 Miners to Pitsf Ford and Union Agree on $100 Monthly Pension Financed by Firm;* Agreement Ends Goodrich Strike — '10-cent Package' for Pensions U^ill Be Used to I iu prove Present Welfare Plan.'

The fourth round this year might well be called the "welfare round." One point is clear — the demand for health and welfare funds in collective bargaining is common in America today. These funds are used to provide workers with some protection in the form of general health insurance, life insurance, and retirement pensions.

Pensions are only one phase of health and welfare programs. But thev present different problems from the many other types of benefits included in such programs. Retirement pensions are de- signed to meet the problems of old age, whereas other benefits apply to the current needs of workers — protection from loss of income and costs of services arising as a result of sickness or accident. Thus pensions involve long-term obligations in contrast to group life or health insurance and unemployment benefits which involve short-term obligations. Such insurance is usually rewritten at fre- quent intervals, while pension plans are not. The long-term nature of pensions makes them a more complex and difficult subject in collective bargaining.

There are many possible definitions of pensions. The term pen- sion, as it is used here, will include any annuity payment made as a result of a formal program to persons retired from active employ- ment because of age or other disability.

DEVELOPMENT OF PENSION PROGRAMS

Insecurit}- in old age is a basic problem of the American worker. His efforts to adjust to the emergencies of old age have met with varied success. Workers who ha^•e been able to save or invest enough funds for old age are few. The cost of insurance protection

has generally been prohibitive. Thus most workers, in spite of their efforts, are retired from active employment without adequate funds to meet their needs. "^

Pensions have been used by industry, government, and unions as one way of meeting the emergencies of old age. As far back as 1874, pension plans were developed in the railroad industry; and there has been a slow, steady increase in the establishment of such industrial pensions over the years. Just how many of these plans are in existence today is not accurately known. A survey of 1945-1946 by the Bureau of Labor Statistics of the U. S. Department of Labor revealed that in the 15,636 manufacturing plants surveyed, 47 per cent had insurance or pension plans for plant workers. Life insur- ance plans were found in 37 per cent, health insurance in 30 per cent, but retirement systems were foiuid in only 5 per cent.'

In order to maintain some sort of money income and to meet such unforeseen old-age emergencies as medical attention, hospitali- zation, and death, some workers have established pension plans through their union. The earliest pension plan of an American union under which benefits actually were paid, and for the support of which a specific fund was designated, was established by the granite cutters in 1905."^ Prior to this time, some iniions had benefit programs such as disability benefits, homes for the aged and dis- abled, and lump simi retirement benefits ; however, these programs are not generally classified as true pension programs. In 1932, about 930,000 union members were covered by trade union pension plans. This represented about 28 per cent of the total membership of or- ganized labor in the United States and Canada at that time.^ In 1946, 15 unions paid old-age benefits amounting to $10,705,348.82^'^ for that year.

Early legislative pension programs are of three broad types: federal, state, and municipal. Early federal programs were confined to military and civil service employees ; state programs included teachers, state employees, and, in some cases, private citizens. Mu- nicipal employee plans were confined primarily to teachers, police- men, firemen, and other municipal employees. Agitation for gov- ernment pension programs became active around 1900, but it wasn't until the 1920's that such programs were well developed. By 1934, just prior to passage of the Social Security Act, twenty-eight states had enacted old-age assistance or pension laws. In addition,

municipalities provided pensions for firemen, policemen, and other local government employees. In this same year, the Federal Govern- ment legislated the first Railroad Employees Retirement Acts."

As might be expected, man)- of these earlier plans were both crude and inadequate. Some have been criticized as being poorly financed, inflexible, and insecure.^" These criticisms stem largely from the fact that the plans were not soundly funded ; they did not adapt readily to changing needs, and they depended completely upon one organization for success. With the entrance of commercial insurance firms into the pension field in 1925, there followed a definite improvement in pension programs." However, since the total work force covered by these plans was small, the economic problems of old age still faced a majority of the American workers.

After the economic collapse in 1929, the government was under great pressure to assist the aged needy. In 1934, President Roose- velt appointed a committee on economic security whose duty, among other things, was to find some means whereby the federal govern- ment could aid the aged of the nation. The result was the enactment of the Social Security Act of 1935 providing the first national old- age insurance system in America. On January 1, 1948, ''about 421/2 million persons were insured under federal old-age and survivors insurance." By June of the same year, "nearly 2.2 million bene- ficiaries, representing lYz million families, were receiving benefit payments at a monthly rate of 42.4 million."^*

There can be little doubt that industrial pensions, trade union pensions, various government pensions, and old-age benefits under social security have improved the economic well-being of aged workers. There are indications, however, that there is a strong feeling among workers that old-age benefits under social security are, at present, inadequate and that supporting schemes (where ncjne exist) are necessary.^' In some cases where existing schemes are in force, liberal benefit revision seems to be favored by the workers. As a result, there has been an increased interest in pen- sions, and many new plans have been adopted. The inadequacy of old-age benefits paid under social security — in view of higher living costs — has been one factor in the increased interest in pensions.

In the current demands for pension plans, there are two other important factors which should ])e recognized. One has been the

enactment of tax regulations favorable to the establishment of pension programs. The Internal Revenue Codes have encouraged the establishment of pensions by permitting industry to deduct a substantial part of the costs from taxes. Wartime wage stabilization was another factor. During World War II, wage and salary in- creases were restricted under wage stabilization regulations. Section 10 of the Stabilization Act, however, defined wages and salaries in such a manner that pensions and insurance benefits in "reason- able" amounts were specifically excluded. The general policy of the Board on pension programs was generally to approve "reasonable" proposals when presented jointly by the parties. In dispute cases, however, the Board generally refused to order the initiation of such plans.

Pensions in Collective Bargaining

The result of these circumstances has been an increase in the demand for pension programs in union-management negotiations. Indeed, pensions are likely to remain in the bargaining setting along with other union demands. In the Inland Steel case, the N.L.R.B. held that under the Labor Management Relations Act of 1947, employers must bargain with their employees on pension or retire- ment plans if the employees recjuest it. The substance of this ruling was that pensions are included in the term "wages" and that the age of retirement falls within the category of conditions of employ- ment.^® The U. S. Supreme Court recently refused to review a ruling of the Seventh Court of Appeals which upheld the Board's decision.^"

Pensions are not new as issues in collective bargaining. In 1911, a contributory pension plan was negotiated by the United States Brewers Association and the International Union of Brewery, Food, Cereal and Soft Drink Workers.^® This plan was never put into operation because it was defeated in a union referendum.

EXTENT OF PENSIONS TODAY

Although there were instances of employers and unions nego- tiating a pension program as early as 1911, agreements providing pension benefits are not too common. The Bureau of Labor Sta- tistics of the U. S. Department of Labor recently estimated that

"more than ihret million \v(jrkers — oxer twice the number in 1947 — were covered ij\- some t\[)e of health, welfare, and/or retirement benefit plan under colleclixe bargaining agreement by the middle of 1948."^'* The number of employees covered by a pension program is much less than this, as the figures mentioned earlier indicate. The Bureau of National Affairs in a recent survey of 1300 contracts found that 20 per cent provide for sick leave with pay, 30 per cent establish health and welfare funds, and 5 per cent provide for pensions."" In spite of the fact that pension plans are not numerous in comparison with other types of benefits, the growth within the last few years has been rapid. Records show that in 1945 almost twice as many new pension plans were estab- lished as in the entire period between 1932 and 1938.

Some industries in which pensions covered by union-manage- ment agreements are found are street-railways, clothing, chemical, paper, mining, textile, building trades, fur and leather, electrical machinerv, food products, automobile, power, and communications. ( Pensions in the railroad industry are provided by federal law. ) While it is not possible to contrast all these plans in detail, it is interesting to note what provisions are made for a plan in some of the agreements.'^

Automobiles

The recent agreement" in the automobile industr}- between the Ford Motor Company and the United Auto VV^orkers (CIO) pro- vides for pensions of $100 a month. The $100 includes any benefits by the federal government under Old-Age and Survivors Insurance. The difference between the amount paid under Old-Age and Sur- vivors Insurance and $100 is paid for entirely by the company. It has been estimated that the cost to the compan\- will Ije about SVa- cents hourly for each eligible empkjyee. The plan covers all hourly- rated workers in the bargaining unit. X^ormal retirement is at age 65 and mandatory at age 68, except that "the company at its own dis- cretion may retire any employee at the age 65 or older by reason of the employee's inability to perform work assigned to him." Workers retiring sooner, with less than 30 years service, get a projjortionately less amount at retirement ; however, no pension will be paid to a worker under 60 years of age unless he is disabled. The agreement provides for joint administration by three members of the union

and three members of the company. The company, however, re- serves "the sole right to select and contract with a qualified Bank or Trust Company to act as the trustee of the Pension Fund. Such trustee shall hold, and be solely responsible for, the investment of the Pension Fund ; and the trustee shall make such benefit payments from the Pension Trust Fund as are specifically authorized by the Board of Administration." Payment under this agreement will start on April 1, 1950. The plan may not be reopened for nego- tiation before March 1, 1955, but any increase in Old-Age and Survivor Insurance benefits will lessen the amount of Ford's con- tribution to the plan.

Bituminous Coal

The retirement program in the soft coal industry is provided for as a part of the provisions setting forth the purposes of the trust created to administer the welfare fund. The purposes are defined in terms of making payments for four types of benefits, one of which is "benefits on account of sickness, temporary disability, death, or retirement." The pension fvmd is set aside out of the general welfare fund which is financed from a 20 cent royalty per ton of coal mined for sale or use. The trustees determine what portion shall be set aside from time to time "based on actuarial computations."

All soft coal miners are covered by the agreements — even those employed bv operators not signatory to the agreements. The miner is eligible for $100 per month at age 62 providing he has been em- ployed 20 years in the industry. It should be pointed out that the $100 figure is "subject to amendment or modification at any time as experience in the operation of the fund may dictate or require."

Shale Brick

The basic provisions in the agreement between the Glen-Gery Shale Brick Corporation, Wyomissing, Pa., and the United Brick and Clav Workers of America (AFL) are almost identical with those of the bituminous coal industry. The only major difference is in financing the fund. The money for this fund comes from the employer and the employees. Each contribute 21/2 cents for each hour worked by the participating emplo}ee.

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Garments

The Affiliated Dress Manufacturers and the Joint Board of Dress and Waistmakers Union of greater New York (I.L.G.W.U.- AFL) previously established a welfare fund which was broadened in 1947 to include retirement benefits for aged workers. The fund is administered by the union"^ and is financed by the employer who contributes 4|/2 per cent of the weekly wages (before tax deduc- tions). One per cent of the total A-Yz per cent is set aside for pensions in a retirement fund. A council of 12 members, six repre- senting the manufacturers and six representing the unions, de- termines the types and amounts of retirement benefits which the union members shall receive within the resources of the fund.

In another agreement between the Merchants Ladies Garment industry and the I.L.G.W.U., the pension benefit is fixed at a maxi- mum of $600 annually for employees who are 65 years of age and are employed bv a member of the employers' association. The con- tribution by the employer is 3 per cent of the w^eekly payroll. The fund is jointly administered, and the total number of men to be retired is determined by the board of trustees. However, the union retains the right to specify the percentage of workers retired from each craft.

Retail Trade

An agreement between John Wanamaker, Inc., New York, and the Retail, Wholesale and Department Store Union (CIO), Local 9, simply states that "the Employer shall, during the term hereof, maintain in full force and effect its 'Plans for Retirement Pay and Death Benefits' to the extent therein provided." This plan is funded with an insurance company.

Steel

The recent agreements in steel were based on a settlement be- tween the Bethlehem Steel Corporation and the United Steelworkers of America (CIO)."* This settlement was in turn based on the recommendation of a 10-cent pension-insurance "package" by a presidential fact finding board which investigated the dispute. The non-contributory nature of the pension program recommended by the fact finding board became an issue over which the parties were

deadlocked. This issue was apparently resolved by compromise. The company agreed to pay the full cost of the pension program (as it had done in the past) while the union agreed to contribute to the fund providing other insurance benefits.

The Bethlehem plan provides for minimum pensions of $100 per month, inclusive of federal Old-Age and Survivors Insurance after 25 years of service with the company, its subsidiaries, or predecessors. Normal retirement is at age 65 ; however, employees may continue in employment with the company at its discretion. The benefits received are based on earnings and service. The base period for computing earnings is the 120-month period (10 years) next preceding the month of retirement. Average monthly earnings over this period are computed. The monthly pension payment is then one per cent of this average monthly earnings figure multiplied bv the number of years of continuous service. For example, an eligible employee whose average monthly earnings in the 10-year period prior to retirement is $350 would get, after 30 years con- tinuous service, $105 a month. Smaller pensions for employees with as little as 15 vears service are permitted on a pro rated basis de- pending on the number of years service below 25 years at age 65. Under this provision the minimum pension payable to the retiring employee is $65 per month.

This pension plan is financed entirely by the employer. The rate of contribution is determined by the needs of the fund, since the company has agreed to keep the fund actuarially sound at all times.

Administration of the plan continues as it was before this cur- rent agreement, i.e., bv appointees of the company. Disputes over operation of the plan will be handled through the regular grievance machinery outlined in the collective bargaining contract.

The plan remains in effect as long as the contract remains in effect and is not to be changed during that time. In the event of contract expiration, the company reserves the right to act, in re- gard to pensions, as it has in the past. The present contract runs from October 31, 1949, to December 31, 1951. Before becoming effective, however, the plan must be approved by the stockholders by March 1, 1950. If the stockholders do not approve the plan, the agreement is not in force.

After the Bethlehem Steel agreement was signed, all of the im- portant basic steel companies, including U. S. Steel, settled with

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the United Steelworkers on substantially the same basis. The i)lans provide pensions of $100 a month inclusive of Old-Age and Sur- vivors Insurance to eligible employees at age 65. Eligibility require- ments differ slightly in the agreements. Financing, except for fed- eral Old-Age and Survivors Insurance, is entirely by employers. Administration of the plan, if it is a new one, must comply with provisions of the Labor-Management Relations Act of 1947.

Local Transit Industry

In an agreement between the Capitol Transit Company, Wash- ington, D. C, and Division 689 of the Amalgamated Association of the Street, Electric Railway and Motor Coach Employees of America (AFL), all aspects of the pension plan are set forth in detail. It is jointly financed by contributions of four dollars a month bv each employee and eight dollars a month for each employee by the company. Every employee is recjuired to participate in the plan, and he is entitled to his full contribution plus interest if he leaves the employ of the company prior to retirement. Benefits of $50 a month for life are provided to those employees who have 25 years of service. Retirement is voluntary at 65 and at the discretion of either party at 70. Administration of the plan is in the hands of a six man committee, three representing the employees and three representing the employers. The fund is administered by a trustee who is selected and appointed by the company subject to approval by the union.

In an agreement between the Akron Transportation Co. and the

Transport Workers Union (CIO),^^ the contract simply provides:

The existing arrangement whereby payments are made to persons who have been relieved from active duty will be continued throughout the period of this contract. Payments at the rate now being made will be con- tinued to April 1, 1950, for all persons now receiving them, and at the rate of $75.00 per month until April 1, 1950, to any person who may be relieved from active duty after April 1, 1949, and before April 1, 1950. In each case, the amount received by the employee as social security, if any, shall be deducted from the amount payable to him.

Railroads

The current Railroad Retirement System is the result of federal legislation first enacted in 1934.-'' This law was declared uncon- stitutional in 1935 by a five to four decision of the Supreme Court."'

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In 1935, Congress enacted a new Railroad Retirement Act^* which was amended in 1937.^^ This amended act provides the basis for the current Railroad Retirement Program. It covers over two million employees of railroads, express companies, sleeping car companies, and their subsidiaries. The basis for financing the retire- ment plan is the Carriers Taxing Act of 1937.^° This act was incor- porated into the Internal Revenue Code in 1939. Financing of the retirement program is by a tax borne equally by the employee and employer on the first $300 of monthly compensation. The initial tax rate was SYz per cent set for 1937. This rate was to 7i/4 per cent by 1949 after a series of Yi per cent increases every three years. Subsequent studies of the program revealed the need for a higher tax schedule if the fund was to be maintained. As a result, a new tax schedule was initiated at the rate of IP/i per cent for 1947 and 1948, 121/4 per cent for the next three years, and 121/2 per cent thereafter. ^^ The employer collects the money initially by payroll deductions and forwards it to the Bureau of Internal Revenue to be paid into the Treasury. The Congress then appropriates to the Rail- road Retirement account enough money to provide for payment of claims. Benefits are related to average monthly wages and are cal- culated by taking 2 per cent of the first $50 of average monthly wages, 11/2 per cent of the next $100 and one per cent of the balance up to $300 a month. The total of these three is then multi- plied by the number of years of service to obtain the amount of monthly pension payment. The maximum pension is fixed at $120 a month. Retirement is voluntary at age 65 or at 60 with 30 years of service. If retired at age 60 after 30 years of service, the monthly payment is reduced by one-eightieth for each calendar month the retiring employee is under 65. A minimum is also pro- vided for employees with 20 years service. The basis for this minimum is a graduated scale of percentages of the employees' monthlv compensation. The administration of the plan is by the Railroad Retirement Board created by Section 10 of the amended act of 1937. There are three members on the Board with staggered terms of five years. These members are appointees of the President subject to advice and approval of the Senate. One member of the Board is recommended by the employers, another is recommended bv the employees, and the third is the public representative.

Thus it can be seen that there is no "pension pattern." Benefit

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payments var)" from an amount to be delermined by the resomxes of the fund to payments of $100 per month. The plan may l)e financed jointly or by the employer. Administration may be handled unilaterally, jointly, tripartitely, or liy an outside agency such as an insurance company. Coverage in the case of mining is the whole industry ; in garments, certain market areas ; and in other cases, it is restricted to certain members of an individual firm. It seems that variatic^n in plans is normal. According to Walter J. Campbell, Associate Editor of the magazine Steel, "The Treasury depart- ment in the past six years has processed about 8000 pension plans. No two were alike in every respect. Pension plans are tailored to fit the requirements of the companies for which they are intended. "^^

UNDERSTANDING A PENSION PROGRAM

What does a pension program mean to an organization and the personnel involved? Clearly the significance of such a program will be different to the employer, the union, and the employee. The fol- lowing analysis attempts to point out the meaning of a pension program for each group.

Employer's View

The major interests of the employer in pensions are probablv in increased efficiency through retirement of older emplovees, attrac- tion of new employees, rew-ard for service, encouragement of con- tinuity of service, reduction in turnover, improvement of morale, increased employee loyalty, increased output per worker, opening of avenues of promotion, and reduction of strikes. Probably no pension program accomplishes all these things, but certainly some of these benefits are possible.

Some employers have been critical of bargaining on pensions. ^^ Some of their criticisms follow^:

1. Unions may insist on economically unsound demands.

2. The technical factors in setting up a pension plan are so numerous and complex that an attempt to bargain on them would be a waste of time.

3. Bargaining on pensions might overburden the collective bar- gaining process and, hence, increase the number of grievances.

4. Unions may press for a pension in firms that are unable to support a pension program.

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5. In an organization containing more than one bargaining unit, it is unsound and impracticable to negotiate a pension plan sepa- rately with each union.

6. Bargaining on pensions is not necessary, and it may be undesirable because industry is already establishing plans at a record-breaking rate. It may deter many firms, which had intentions of establishing a plan, from going ahead because they are uncer- tain of bargaining in these matters.

7. Bargaining in good faith, as required by law, could not be enforced in connection with bargaining on pensions. The problems are more subtle and complex; hence any investigation attempting to prove willful disagreement would be most difficult.

8. It is impractical to bargain on matters where it is advisable or necessary to obtain stockholders' approval.

9. Retirement as a matter of negotiation will defeat one of the basic objectives of a pension plan — to retire aged workers who are less efficient workers.

10. Rigidity in industrial cost will result from any obligation to pay out large sums of money over a long period of time.

11. Pensions foster a false sense of security because the em- ployer's ability to pay may be lessened if demand for the product decreases; thus those employees let out of employment lose their coverage and security.

12. Pensions are long-term obligations, and it is a fallacy to think of pensions as wages because wages are paid currently for work performed.

Worker's View

Workers are interested in pensions chiefly as a protection against old age. In the past, most workers viewed pensions as gifts or rewards for long, efficient, and faithful service. This gift con- cept is probably accounted for by the fact that under most early plans, the employer did not obligate himself by contract to pay any pension.'* Union demands thus far this year, however, would indi- cate that a great number of workers are supporting pension de- mands in collective bargaining. Walter J. Couper of Industrial Relations Counselor, Inc., New York, in an address before the American Management Association said: "We must recognize that from the viewpoint of employees and, I think, the general public,

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it seems eminently reasonable to give employees a voice about a matter which touches their welfare and the welfare of their families as closely as benefit programs do."^^

Union Position

Unions are interested in pensions as a means of aiding their membership to obtain adecjuate old-age protection. Besides pro- viding for the membership's needs, a union may w^in or strengthen the loyaltv of its meml)ers if a pension program is successfully nego- tiated. This probably accounts for some unions' desire for a pro- gram. Just how many unions are in favor of bargaining on pensions is difficult to determine. In the past, some large unions were opposed to welfare programs generally. ^*^

Unions which favor bargaining have given the following reasons :

1. Pensions are wages and are subject to bargaining as are other wage items.

2. A negotiated pension plan will remove the notion of paternal- ism sometimes attached to pensions.

3. A sounder plan will be provided if those who are affected by the plan have a voice in its direction.

4. Bargaining will insure the establishment of plans that might never have been established.

5. Liberalization of benefits to fullest extent would be impos- sible without union pressure.

6. Industrial peace will be more easily secured by enabling unions to have a voice in matters concerning the workers' welfare.

7. Pensions are needed to stabilize industry.

Who Pays?

The answer to the question of who pays is far from settled. In some cases, pension costs are viewed as additional labor costs of the employer. In others, pensions are considered a substitute for additional current wages for the employee. Some hold the opinion that the cost of such plans are borne by the consumer — particu- larly when the fund is financed by means of a royalty device on the product.

The same controversy is seen in opinions on who benefits from pension plans. The benefits cannot be determined in terms of money

IS

alone nor in terms of one group. Increased efficienc\-, improved morale, reduced labor turnover, and payroll savings are benefits that the community, as well as the employer and the employee, may share.

PENSION COSTS

The financial outlay to initiate and maintain a pension program represents the total cost. Although these costs are difiicult to esti- mate beforehand, an approximate forecast is usually possible. This is frequently the place at which the actuary can serve an important function. The sum total of his estimates will be estimated costs or "valuations."

What are the factors affecting costs over the lifetime of a plan that an actuary considers in arriving at an estimate of the total financial outlay? The most important of these are:^'

1. Mortality rate among employees covered under the plan be- fore and after retirement.

2. Rate of interest earned by the funds.

3. The age and rate at which retirement takes place.

4. The rate of withdrawals from the plan.

5. The ages and rates at which new employees are hired.

6. Amount of money paid to employees during their period of employment.

7. Sex distribution of employees.

8. Schedule of benefits intended.

9. Method of funding, i.e., of accumulating resources to pay the pension.

10. Expense of administering the pension plan.

Since these costs are estimates, there will be cases of overesti-

mation or underestimation. Murray W. Latimer, an expert in the

field, makes this point clear in a report to the Trustees of the

United Mine Workers.'*

Data relating to the ages, lengths of service, and number of miners are, of course, desirable. But these factors, without more, will not give an accurate indication as to what the pension load of the miners' welfare fund would be initially or in the years to come. That load would be the result of individual decisions made by tens of thousands of individuals having a wide variety of conditions to face and a host of considerations to take into account. If every remotely relevant fact were collected about every miner who has worked in an American coal mine since 1776 and all the actuaries now alive were to do nothing for the next ten years but make estimates of

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what the proposed pension phm wouUl cost, they wotild still not know the answer. All their data wonld not tell them what the miners themselves would think, and that, in the final analysis, would be controlling.

The shortest, quickest, cheapest, and, in fact, the only way to find out what a pension plan costs is to try it out — and for several years. The col- lection and analysis of data for the railroad retirement system cost many millions, and none of the estimates were borne out. Some were too high, some were too low — and if the life of the system depended upon the infallibility of prognosticators, it would never have left the ground. And so it is with all pension systems.

Ill view of the tact that all circtinistaiices cannot he anticii)ated, the parties to a pension program generally want to provide enotigh flexihilitv in the plan to adjtist the costs to acttial experience.'*''

Initial Cost

The initial cost of the plan will depend primarily on the method of setting up the ftmd and the estimates made of mortality, rates of interest, withdrawal rates, wage scales, benefits intended, and expense of operating the plan. The method of funding may be determined by what the employer or a combination of the employer and employee are able to pay, economic conditions, and particularly the amount of benefit the parties intend to provide.

It is important to recognize that the method of funding involves the funding of both past and future services. The fund must have enough money to pension employees who are eligible to retire at the time the plan is started, as well as those who will become eligible within a few years, on the basis of services rendered in the past. Money to be paid for services rendered in the future will build up in the fund over the years. Past service credit can be funded by setting aside at the beginning enough money to cover all past service, but this is seldom done because the financial outlay in most cases would be too great. The amount of past service that can be funded initially will depend upon the amount of money available and the anticipated schedule of payment.

It is not tincommon to find what appears to be a wide discrep- ancy in the estimates of initial cost for a certain group. The reasons for a discrepancy can generally be found in the differences in assumptions regarding expense, mortality, interest rates, turnover, contributions, benefits, and method of accumulating the fund.^" If the person or persons making the estimates were to use the same assumptions, the initial estimate of cost would be the same.*'

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Cost of Operation

Once a pension plan is initiated, the factors estimated by the actuary become operative. The original estimates may be affected by a number of things such as change in interest rates, mortality, administrative costs, turnover or other unforeseen circumstances which influence total receipts and disbursements.

Adjustments will be necessary to the extent that the original estimates are not in accord with experience. In this connection, there is a need for both unions and management to keep accurate records as the plan operates so that the experience over the years can be more useful in developing a sound plan.

In an insured plan, the effect of a cost change is generally borne by the insuring agency. If a plan is going to cost more than origi- nally estimated, the insurance company stands to lose by the amount of their miscalculations. Generally, insurance firms add an amount to the estimated premium to cover contingent expenses. This is technically known as a "loading charge." If costs are overestimated so that more money is paid into the fund than is needed, many insuring agencies refund part of the surplus in the form of dividends.

In a plan that is not handled by an insurance company, the effect of a cost change is borne by the parties. In view of this, the expense of administering this type of plan takes on more significance. The more tangible expense items encountered are fees for the service of an actuary both in starting a plan and in later analyses; legal fees for services in interpreting laws, securing Treasury approval of the plan, and in drafting the trust agreement; medical fees, if disability allowances are permitted ; trustees' fees for administering the plan ; and finally, expenses involved in the maintenance of records and staff to keep the plan in operation.^-

Exact cost, then, varies and cannot be determined until a pro- gram has been tried out for several years. General estimates of cost as a percentage of payroll or in cents per hour are frequently made as a rule of thumb. For example, H. Charles Kwasha, in an address before the American Management Association, estimated a plan may cost "anywhere from ten cents to upwards of twenty cents per hour."*^ Because there are so many variables to be con- sidered in each plan, estimates without a knowledge of basic as- sumptions made are of doubtful validity as a measure of what a plan will actually cost.

NEGOTIATING A PENSION PLAN

The foregoing is a general picture of a pension program. Assum- ing that the parties agree to negotiate a plan, the following major problems confront them.

1. What kind of plan is to be selected?

2. Who is eligible to participate in the plan? Who is eligible to retire ?

3. What benefit formulas will be used?

4. How will it be financed? Will the employer pay all the costs or will the employees share the burden ?

5. When does an employee commence to build up a right in the fund ?

6. Should the plan be set up separately or be included in the union agreement?

7. Who will administer the fund?

Choosing the Plan

There is no one plan that fits the need of every firm or industry. The final choice of the plan and the provisions that are written into it will depend upon an analysis of several factors. Considering the long term nature of the program, it is of great importance that the analysis be sound. One way to contribute materially to the plan's soundness is to have someone who is thoroughly familiar W'ith the pension field handle the actuarial details. Pension consultants, some insurance firms, and other actuaries render services along these lines.

Legal assistance can be helpful throughout the development of a program. Requirements of various sorts must be met by the parties involved. Legal counsel can be particularly helpful in secur- ing Treasury approval of the plan and in setting up a pension trust if this device is used. The following is a list of other laws and regulations which may affect a given plan.**

L Federal. A. Taxes.

L Estate taxes.

2. Income taxes.

3. Social Security taxes.

4. Unemployment taxes.

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B. Government Contracts.

C. Labor-Management Relations Act of 1947.

D. Fair Labor Standards Act.

E. Investment Company Act of 1940.

F. Securities Act of 1933 and the Securities Exchange Act

of 1934. II. State.

A. Taxes.

1. Estate and inheritance taxes.

2. Income and other tax laws.

3. Unemployment taxes.

B. Debtor and creditor laws.

C. Insurance laws.

D. Labor laws.

E. Accumulation rules.

F. Perpetuity rules.

Authorities frequently suggest the following factors be con- sidered in selecting a plan:

1. Type of industry.

2. Size of plant.

3. Number of employees.

4. Mortality rate of employees.

5. Peculiar hazards and factors favorable to a long life.

6. Composition of the work force; percentage of male and female employees.

7. Ages and rate at which retirement is contemplated.

8. Labor turnover.

9. Salary and wage scale during the period of employment.

10. Extent of benefit sought.

11. Earning capacity of employees.

12. Financial relation of the firm to other firms.

13. Various financial risks frequently involved in the question of pension funds.

Eligibility

The question of eligibility raises two sets of problems. The first concerns the question of who is eligible to join ; the second, who is eligible to retire.

20

In the past, eliii^ibilily re(|iiirenK'nts have usually been restricted in a number of ways, for example, b)- excluding some groups from coverage, by salary or wage limitation, by ref[uiring a waiting period, b}- defining "employee" in such a manner as to include or exclude certain groups and by setting age limits. In collective bar- gaining, it may be difificult to negotiate eligibility restrictions be- cause frecjuently the workers may feel they are trading a cents-per- hour increase in wages for a pension. Exclusion of workers who do not have five years of continuous service, for example, may mean that as many as half, or even more, of the union membership would be ineligible under the plan. Those who are not eligible under many circumstances might conceivably favor a wage increase instead of a pension.

In the case of a plan where nonunionists are employed or where there may be other bargaining agents as in the case of a craft union within a plan organized by an industrial union, there is another problem. Should the plan cover all employees or only those in the bargaining unit negotiating a plan ?

Eligibilitv for retirement presents another kind of problem. At what age shovtld retirement begin? Should attainment of a certain age be the only requirement? Should there be a provision stating conditions for retirement prior to normal retirement age? Should retirement be compulsory, at the discretion of the employee, or at the discretion of management?

Benefit Formulas

The amount of benefits to be paid is a fundamental feature of anv plan. This amount may be determined in four basic w^ays: the fixed-benefit system, the money-purchase formula, the flat-per- centage pension, and the flat pension.

The fixed-benefit system is related to service. The amount of pension to be received w^ill be a fixed percentage of earnings for each year w^orked. For example, at a rate of one per cent, a man who has been employed for 20 years will get 20 per cent of his earnings. A man who has been employed for 25 years will get 25 per cent of his earnings, etc. Earnings may have a number of mean- ings. The precise definition would be determined by the parties.

The money-purchase formula is one under which a specified part of the employee's earnings is contributed each year. This stun,

21

together with any money deposited by the emplcjyer, is used to purchase an insurance contract which provides for a certain pension. In this case, the amount of the pension, of course, is specified in the contract purchased.

Under the ffat-percentage pension, every employee receives a uniform percentage of his earnings over a specified period. The percentage may be something like 20 per cent, 25 per cent, 30 per cent and in some cases as high as 50 per cent.

The flat pension is not related to earnings. Under this system. any employee eligible to retire receives a flat amount regardless of his earnings, for example, $50, $75, or $100 monthly. This type of benefit is one that is currently sought by such unions as the CIO United Automobile Workers and United Steel Workers.

Many different combinations of these formulas are possible. The major problem facing the parties is to determine the type, amount, and details of the benefit provision which will provide the greatest benefit for the worker within the resources of the fund. In this connection, Old-Age and Survivors Insurance may serve as a "jumping-off" point. For example, if the desired benefit at retire- ment is $100 per month and the average yearly earnings of the employees to be covered is $1800, then the primary monthly bene- fits from Social Security will be $42, assuming 40 years of employ- ment. The amount to be funded by the parties would be $58 per month per employee. Of course, this is an extreme simplification of what the parties are faced with. Employees' service and earn- ings may vary considerably. Therefore, their old-age benefits under social security as well as the total amount of money to be funded will necessarily vary.

Financing

The big issue in bargaining is likely to be over the matter of "who pays how much." The plan may be financed entirely by the employer, or it may be contributory. If it is contributory, the em- ployee makes some contribution to the fund. According to the Bureau of Labor Statistics, "the present trend is toward complete financing of the plan by the employer, or toward lowering the em- ployee's share of the cost in a contributory plan."*^ Some points to consider if employee contributions are a feature of the plan are that the employee contributions cannot be deducted from taxes, that

22

the plan may require registration under the Securities Exchange Act of 19vS3 unless membership and conlribulion are compulsory, that liens by the employee or his survivors may be created against the plan, and that employee contributions may be subject to specific legislation such as state debtor and creditor laws/"

Provision for Payment

Once the source and amount of money is determined there are two basic ways to provide for payment of [benefits under the terms of the plan: the unfunded method and the funded method.

In the unfunded method, the payments are made "out of pocket" from the resources of the group sponsoring the program. In some cases, reserve accounts have been created from which these payments are made. In either case, no money or assets are segregated from the control of the sponsoring group. Many early pension programs used this method. Today few plans are unfunded.

In the fimded method, the amount of money or assets used to cover the cost of the program are segregated from control of the sponsoring group. Usually, money is paid into this fund and accumulates over the years. There are two basic ways of funding a program. It may be funded with an insurance company, or it may be self-administered. Insurance fimding is handled by individual or group annuity contracts. An employer or group sets aside from the assets of the business a sum of money which purchases a certain amount of pension at the age of retirement. Whenever an eligible emplovee reaches retirement age, he is paid a pension in accordance with the terms of his insurance contract. In the self-administered plan, a determined amount of money or assets is deposited in a "pension trust" which is set up as an outside agency (other than an insurance company). Money in the "pension trust" is accumulated over the years and is invested, usually in government securities. When an eligible employee reaches retirement age, he is paid from this fund.

\^arious combinations of the funded methods are possible, and the parties to a jorogram may find it adA'antageous to use combined methods.

Employees' Right in the Fund

When does an employee begin to build up a "right" in the fund .' When does he come to have a vested financial interest in it so that

23

if he leaves the company's empIo\- before he is eHgible for regular pension benefits, he is entitled to financial reimbursement? This problem is an important one in determining the cost of the program.

It is important also in gaining acceptance of the plan, par- ticularly when the program is an issue in collective bargaining and the employees feel they are trading a wage increase for pensions. The plan may be rejected if vesting requirements are such that a large number of employees are excluded from building up a right which can be claimed if a worker is laid off or leaves voluntarily.

The amount of vesting permitted, however, will have to be con- sistent with a sound program. The danger of an extremely liberal vesting provision is that the fund will not have sufficient money to pay claims as they come due. A sound plan must be able to pay these claims and remain solvent.

The Contract

After the parties agree to what the plan should include, the formal provisions of the plan are written. The immediate question is whether to incorporate the plan into the contract as a part of the agreement or set it up separately. This question is related to the issue of items within the plan that the parties agree are negotiable. This may be the entire plan or only a part of it. If the entire plan is not a part of the collective bargaining agreement, reference may be made to the plan in the contract in terms of an agreement to have a plan, its purpose, and how it is to be financed and admin- istered. The details of the plan may then be written separately.

Whether the plan is insured or trusted, or is written in the con- tract or separately, the following elements are covered in most plans :

1. Eligibility for membership and receipt of income.

2. Retirement for age or other disability.

3. Retirement benefits.

4. Employer and employee contribution.

5. Vesting rights.

6. Method of funding.

7. Mode of settlement of benefits.

8. Provision for termination and modification of the plan.

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After Negotiation

Once the plan is put into operation, the major problems that develop are in administration. Administration of a pension program means two things: administration of the fund and administration of the plan. Administration of a fund negotiated under a collective bargaining agreement must conform to the requirement of Section 302 (c) of the Labor-Management Relations Act of 1947. This section requires that unions and management must have equal rep- resentation on the administrative board. To handle deadlocks, pro- vision for settlement by a neutral party must be included.

Administration of the day-to-day details of the plan may be handled by the union, the employer, a committee of both, or by the administrators of the fund. Insurance companies may administer these details in cases where the plan is funded by them. There seems to be no general rule as to the best method of administering the plan. Probably the guiding consideration is the expense involved under each method for the intended plan. There is no complete evidence to prove that one method is cheaper than another under all circumstances.

Economic Considerations

There are broad implications to any widespread industrial pen- sion movement. Some authorities condemn pension plans as being economically unsound. The major objections are frec[uently based on the following contentions:

1. Pensions do not permit the fullest utilization of labor re- sources, inasmuch as mobility is reduced and many workers are retired who are fully capable of producing wealth.

2. To create a pension fund, the parties necessarily do not spend all their money. This results in oversaving which makes it impos- sible for consumers to purchase all goods produced.

3. Pensions make the availability of capital for investments more difficult because large sums of money are tied up in funds. Thus, industrial expansion is retarded.

4. Old age is a social problem outside the province of any one industry or firm, and it is too costly to handle on an individual basis. The proljjem can be handled only In" go\-ernment on a na- tional basis.

25

Unfortunately there are no data available upon which the pen- sion development can be evaluated in terms of its total effect. It is not possible to determine the validity of many of these objections. The Social Security Administration is building up a significant amount of data from which social programs can be evaluated. To date, this information is too limited to enable one to generalize. Some economists have indicated that old-age insurance has in- creased the mobility of the workers.*' It is possible that industrial pensions would tend to decrease the workers' mobility. There has been no evidence that employer and employee contributions to social security have hindered capital formation, investments, or consump- tion. However, generalizations about industrial pensions on such a limited basis is not possible.

The responsibility of caring for aged workers is a part of the broader socio-economic problem of social security which is yet unsolved. Some of the problems confronting the nation as a result of the rising proportion of the aged are becoming increasingly clear. Professor Seymour Harris of Harvard University recently out- lined some of these problems in an article in the New York Times. *^ Regarding the economic implications he said:

First, the country will have to support an increased proportion of old. . . . Obviously of economic significance is the fact that the old consume without producing. ... If each citizen 65 and over would receive $1,000 in goods and services yearly, then the cost to the nation of an adequate program for the old should be about $11 billion annually today, and about $18"billion by 1975 and $21 billion by 2000. (This leaves out of account the needs of the young old.) . . .

Second, these $11 to $21 billion will drain substantial resources from the economy. . . . The important issue is not how much is saved for old age but what the old receive and should receive in goods and services. . . .

Third, the quest for security in old age raises the issue of oversaving. . . . Many explain depression by oversaving: the money not consumed (saved) does not always find an outlet in investment and, therefore, is hoarded. The result? Producers do not sell all they produce, and hence incur losses. . . .

Fourth, as the proportion of those 45 and over rises, the young will experience difficulties in rising to the top. . . .

Fifth, the deployment of resources for a mature population will be substantially different from that for a young one. The old spend relatively less on clothing, accessories, jewelry, housing and household operation, automobile travel, outdoor sports, dancing, education, foreign travel. They spend more, however, on medicine, railroad travel, religion, institutional care, and other services of various kinds. . . .

A changing pattern of demand, buttressed by appropriate public policies, will also influence the regional development of the country.

26

In an effort to meet some of these problems, social legislation of a more liberal and comprehensive nature may be passed in the future. If such legislation were passed, it would doubtless affect industrial pensions, but to what extent would still be conjecture.

Social Considerations

All the social implications of a pension program are too numer- ous to be considered here. A few major points, however, should be mentioned. First of all, with a greater development of private pension plans in industries there may be some agitation from those industries for removal from coverage under the Social Security Act. Secondly, even with well developed private pension plans, a great number of workers would still not be covered. This would indicate that private pensions are not the solution to the old-age problem. In this connection, those who favor a national approach to the problem have emphasized the point that welfare funds are supplementary security measures. Arthur J. Altmeyer, Social Se- curitv Administrator Commissioner, said recently:*^

I think some of us tend to forget at times that the effectiveness and vahie of supplementary security measures are largely dependent upon the existence of a basic program which can be supplemented. The multiplication of many special and limited plans is no real substitute for a basic program. This issue was debated at length in 1935 when the original Social Security Act was under consideration. There was considerable support for proposals which would have permitted the substitution of separate employer retire- ment plans for coverage under the basic public program. It was recognized that they would make difficult or impossible the assurance of basic security to workers who changed employment, and that there would still be room for special retirement plans to supplement the basic program.

-V final word of caution. Throughout this bulletin, pensions have been treated as a method of meeting the problems of industrial workers of advanced age. It cannot be overemphasized, however, that pensions are designed only to assist aged workers to meet some of their economic needs. It cannot be claimed that they are the solution to what is being recognized increasingly today as the social problem of old age. How to provide the necessary life satis- factions for its older members and to utilize their continuing, even if diminished, energies and desires for creative work — that is an important but highly complex problem for this country. Obviously, pension schemes as they are now conceived may or may not be an aid to the solution of this broader issue.

27

SUMMARY

Although the establishment of pensions for retired industrial workers through union-management collective bargaining is not altogether a new development, most industrial pension plans until very recently were established unilaterally by trade unions or by management.

The present interest in pensions has been the result of such factors as:

1. The low level of social security benefits and the high cost of living.

2. Favorable tax legislation.

3. Wage stabilization policy in reference to benefit demands.

4. The N.L.R.B. ruling in the Inland Steel Case.

Bargaining over pensions raises several peculiar problems dif- ferent from those involved in negotiating other aspects of the collective agreement. Parties to the agreement are confronted with the varied problems of selecting, financing, and administering a plan. In addition, regulations governing eligibility, amount of the benefit, retirement provisions, and vesting rights must be agreed upon. Handling these problems requires considerable familiarity with the intricacies of a pension program, as well as the guidance of experts in the field.

The fact that pension plans ha^•e become a significant new issue in collective bargaining has raised the question of how these limited firm or industry-wide pension arrangements fit into the now well established old-age insurance program set up by the Social Security Act. Is a dual system of retirement pensions desirable? If not, which direction offers the greatest promise of providing adequate protection to the greatest number in the most economic manner? This bulletin has not attempted to answer these important questions of public policy. To date, it would appear that current retirement benefits payable under the Social Security Act are insufficient to meet the economic needs of retired workers, and that, therefore, the industrial pension plans are usually A'iewed by unions and man- agements as supplementary to the basic system — that is, to "make up the difference" in need.

28

Notes

1. Chicago Tribune, October 1, 1949.

2. St. Louis Fost-Dispatch, August 4, 1949.

3. New York Times, October 1, 1949.

4. St. Louis Post-Dispatch, September 30, 1949.

5. New York Times, October 1, 1949.

6. John J. Corson, "Our Pension ^Madness — and Possible Cures," Nezv York Times Magazine, July 3, 1949 ; Seymour E. Harris, "What to Do With 18 Million Aged?" Nezv York Times Magazine, July 10, 1949; Abraham Epstein, Facing Old Age (New York: Alfred A. Knopf, Inc., 1922).

7. Evan Keith Rowe and Abraham Weiss, "Benefit Plans Under Collective Bargaining," Monthly Labor Review, Vol. 67, No. 3 (September, 1948), p. 230.

8. Alurray W. Latimer, Trade Union Pension Systems (New York: Industrial Relations Counselors, Inc., 1932), p. 21; Florence E. Parker, Beneficial Activities of American Trade Unions, U. S. Department of Labor, Bureau of Labor Sta- tistics, No. 465, pp. 33, 34.

9. Latimer, op. cit., p. 116.

10. Report of the Proceedings of the 66th Convention of the American Federa- tion of Labor (1947), pp. 207-210.

11. Harry A. Millis and Royal E. Montgomery, Labor's Risks and Social Insurance (New York: McGraw-Hill Book Co., 1938), Chapter VIII, pp. 388-392.

12. Phillip Taft, Econoinics and Problems of Labor, (Harrisburg, Pa.: Stack- pole Sons, 1942), pp. 228-229.

13. Hugh O'Neill, Modern Pension Plans, (New York: Prentice-Hall, Inc., 1947), Chap. II.

14. Federal Security Agency, Social Securitv Bulletin, \o\. 12, No. 2, (Feb- ruary, 1949), p. 3.

15. Corson, op. cit.; "Two Wav Drive for Social Security," Econo)nic Outlook, Vol. IX, No. 12, (December, 1948).

16. In re Inland Steel Co., 77 NLRB 1 (1948); Rowe and Weiss, op. cit., p. 116.

17. Inland Steel Co. v. A'ational Labor Relations Board et al., 22 LRRM 2506 (Sept. 1948) ; 93 L. Ed. 839. Petition for Writ of Certiorari Denied. April 25, 1949.

18. Walter J. Couper, "Collective Bargaining on Pensions and other Em- ployee Benefit Plans," Personnel Series No. 123, American Management Associa- tion, p. 5. For a summary of early trade union beneficial activities, see Parker, op. cit.

19. Rowe and Weiss, op. cit., p. 229.

20. Bureau of National Affairs, Labor Relations Reference Manual, \'ol. 22, (September, 1948), p. 3.

21. For a compilation of various agreement provisions, see U. S. Department of Labor, Bureau of Labor Statistics, Employee-Benefit Provisions (Selected Excerpts from Collective Bargaining Agreements) March, 1949 (Revised) ; also Bureau of National Affairs, Inc., "Collective Bargaining Negotiations and Con- tracts," Contract Clause Finder, 44:1-804.

22. "Text of Ford-LI.A.W. Retirement and Welfare Plan," Bureau of National Affairs, Labor Relations Reporter, p. 293.

23. This fund was established prior to the enactment of the Labor-Manage- ment Relations Act of 1947 and is exempt from its provisions in Sec. 302C.

29

24. Bureau of National Affairs. Inc. Labor Relations Reporter, \o\. 25, No. 1, pp. 1-3.

25. Agreement between the Akron Transportation Company and the Trans- port Workers of America, CIO, Expiration date, April, 1950.

26. Public No. 485, 73rd Congress, 2nd Session, Chapter 868, Section 3231, June 27, 1934.

27. Railroad Retirement Board et. al. v. Alton Railroad Company et. al., 295 U. S. 330 (1935).

28. Public No. 399, 74th Congress, 1st Session, approved August 29, 1935.

29. Public No. 162, 75th Congress, 1st Session, approved June 24, 1937.

30. Public No. 174, 75th Congress, 1st Session, approved June 29, 1937.

31. For a complete analysis, see Jack M. Elkin, "The 1946 Amendments to the Railroad Retirement and Railroad Unemployment Insurance Acts," Social Security Bulletin. December, 1946.

32. Steel, April 4, 1949, p. 72.

33. For example. Some Major Aspects of Employee-Benefit Plans, (New York: Industrial Relations Division, National Association of Manufacturers, 1948).

34. Arthur David Cloud, Pensions in Modern Industry (Chicago: Hawkins and Loomis, 1930), Chap. 10.

35. American Management Association, Personnel Series No. 123, p. 9.

36. Nathaniel Minkoff, "Trade Union Welfare Programs," Monthly Labor Review, Vol. 64, No. 2, (February, 1947), pp. 202, 203.

37. For a detailed discussion of pension costs see O'Neill, op. cit.. Chap. IV.

38. Report of Murray W. Latimer to the Trustees of the UMWA Welfare and Retirement Fund of 1947, at their meeting, April 11, 1948. (Unpublished.)

39. Campbell, op. cit., p. 76; Couper, op. cit., pp. 10, 11; Outline of U.A.li'.- CJ.O. Collective Bargaining for Supplementary Security Programs (Detroit: United Auto Workers-Congress of Industrial Organizations, 1949).

40. N. H. Seefurth, "A Second Look at Pension and Profit Sharing Plans," Financial Management Series, American A^anagement Association, No. 87, pp. 30, 31.

41. O'Neill, op. cit., p. 89.

42. Ibid., p. 185.

43. American Management Association, Personnel Series, No. 118, p. 9.

44. Esmond B. Gardner and C. Jerome Weber, Pension Bonus and Profit- Sharing Plans (New York: Chase National Bank of the City of New York, 1943), pp. 19, 20.

45. Rowe and Weiss, op. cit., p. 232.

46. Gardner and Weber, op. cit., p. 16.

47. Sumner H. Slichter, "The Impact of Social Security Legislation upon Mobility and Enterprise" American Economic Revieiv (Supplement), March, 1940, pp. 44-50.

48. Seymour E. Harris, "What to Do With 18 Million Aged?" Nezv York Times Magazine, July 10, 1949, pp. 33, 34.

49. Arthur J. Altmeyer, "Social Security and Welfare Funds," Union Health and Welfare Funds (National Industrial Conference Board Studies in Business Economics, No. 8, New York, 1947), p. 23.

30

Selected Bibliography

American Management Association. Employee Benefit Plans and Collective Bar- gaining. New York, 1948. 27p. (Personnel Series No. 123.) . Trends in Employee Health and Pension Plans. New York, 1948. 30p.

(Personnel Series No. 118.) Bureau of National Aflfairs. Collective Bargaining Negotiations and Contracts,

Control Clause Finder, Employee Benefits. Pp. 44:1-804. . Collective Bargaining Negotiations and Contracts. Bargaining Techniques

and Trends; Representative Contracts in Tc.vt. "Trends in Employee Benefit

Clauses." Pp. 15:701-16:101. Cloud, A. D. Pensions in Modern liuliistry. Chicago: Hawkins and Loomis, 1930.

531p. G.ARDXER, Esmond B., and Weber, Tero.me C. Pension, Bonus, and Profit-sharing

Plans. New York: The Chase National Bank, 1943. 92p. H.\BER, William, and Cohen, Wilbur J. Readings in Social Security. New

York: Prentice-Hall, 1948. 634p. Industrial Relations Counsellors, Inc. Pension Planning in the Light of Current

Trends. New York, 1949. 25p. (Industrial Relations Memos. No. 111.) International Union, United Automobile, Aircraft and Agricultural Implement

Workers of America, CIO. Social Security Department. Bargaining for

Social Security. Detroit, January, 1949. 4p. . Formulation of Social Security Programs Under Collective Bargaining.

Detroit, January, 1949. 5p. Journal of Commerce (New York) "^^lanagement and Labor Look at Retirement

Plans." Vol. 217, No. 16 (735) (September 23, 1948), Second Section. 23p. . "Recent Trends in Employee Pension and W'elfare Programs." \'ol. 212,

No. 16 (368) (June 16, 1947), Second Section. 32p. . "Pensions and Profit-sharing Expansion." \'ol. 208, No. 16053 (May 29,

1946), Second Section. 40p.

"Approval of Pension and Profit-sharing Plans." ^"ol. 204, No. L"^, 740

(May 15, 1945), Second Section. 50p.

Latimer, Murray W'. Industrial Pension Systems. New York: Industrial Re- lations Counsellors, 1932. 2v.

. "Social Security in Collective Bargaining." Nem York University First

Annual Conference on Labor. New York: Matthew Bender, 1948. Pp. 9-38.

Monihlv Labor Review. "Union Health and Welfare Plans." February, 1947. Pp." 191-214.

O'Neill, Hugh. Modern Pension Plans, Principles, and Practices. New York: Prentice-Hall, 1947. 382p.

RowE, Evan K., and Weiss, Abraham. "Benefit Plans Under Collective Bargain- ing," Monthly Labor Review, September, 1948. Pp. 229-334.

L". S. Bureau of Labor Statistics. Employee Benefit Provisions. (Selected Ex- cerpts from Collective Bargaining Agreements) March, 1949. 74p.

. Employee Benefit Plans Under Collective Bargaining. (Reprinted, with

additional data, from the January, May, and September, 1948, issues of the Monthly Labor Reviezv), March, 1949. 74p. (Bulletin No. 946.)

. Collective Bargaining Provisions; Employee Benefit Plans Part II —

Pension Plans (Preliminary Draft) September, 1949. 106p.

31

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Plant-Protection Employees Under Current Federal Labor

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1949 Proceedings Third Annual Labor Journal Editors Conference,

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CURRENT INSTITUTE PUBLICATIONS

Labor-Management Relations in Illini City, Volume 1 The Case Studies and Volume 2 Explorations in Comparative Analysis. By W. Ellison Chalmers, Margaret K. Chandler, Louis L. McQuitty, Ross Stagner, Donald E. Wray, and Milton Derber, Coordinator.

Volume 1: Cloth $10.00, Case Study Reprints $1.25 Volume 2: Cloth $7.50. Both Volumes $15.00

Channels of Employment. By Murray Edelman. Paper: $2.50

Union Decision-Making in Collective Bargaining: A Case Study on the Local Level. By Arnold R. Weber. Paper Mimeographed Text: $1.00

Legislation by Collective Bargaining. By Gilbert Y. Steiner. Paper: $1.00

National Economic Planning by Collective Bargaining.

By Murray Edelman. Cloth: $2.00. Paper: $1.50

The LInion Member Speaks. By Hjalmar Rosen and R. A. Hudson Rosen. (An ILIR research study published by Prentice-Hall, Inc.). Cloth: $4.95

BULLETIK9S (Cop'ies $0.10 euch except where indicated.)

Assignment and Garnishment of Wages in Illinois

Trends and Problems in LTnemployment Insurance

LTnions, Management, and Industrial Safety

Supervisory Training — Why, What, and How

Workers on the Move

Job Evaluation

Motion and Time Study ($0.25 each)

Workmen's Compensation in Illinois ($0.50 each)

List of Publications, available from

EDITORIAL OFFICE

INSTITUTE OF LABOR AND INDUSTRIAL RELATIONS

704 SOUTH SIXTH STREET

CHAMPAIGN, ILLINOIS.

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