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Published online by Cambridge University Press: 20 January 2009
Reputedly some Las Vegas casinos set their roulette wheels so that overall ‘the house’ never loses although many play and some players win. In effect, the house sets the odds which remain unknown to the players. So it is with private pension plans in the United States, with the important difference that employees cannot decide whether to play or not; the decision is made for them by their employer or through collective bargaining.
1 As occupational schemes are called in the United States.
2 While statistics abound in this field, they consist quite often of sheer guesses. It is believed that collectively bargained plans provide roughly half the employment-based group pension plan coverage.
3 Annual Statistical Supplement, 1969, Social Security Bulletin, Table 33, p. 49 (1972).Google Scholar
4 In the 1920s and 1930s somewhat systematic plans became fairly common in the railroad industry. They failed wholesale during the depression and were bailed out to a limited extent by the Railroad Retirement Act, a statutory programme enacted in the mid-1930s and administered by a federal agency.
5 Lincoln's colourful characterization of General McClellan's condition when he constantly put off prosecution of the Peninsular Campaign.
Expanded coverage has lagged chronically behind the projected rate for almost a decade. Unemployment among Older Workers, Hearings before the Subcommittee on Employment and Retirement Incomes of the US Senate Special Committee on Ageing, 92nd Cong., 1st Sess., Part I, 4 June 1971, p. 57.Google Scholar
6 This and the remainder of the paragraph are based upon Beir, Emerson, ‘Incidence of Private Retirement Plans’, Monthly Labor Review, pp. 37 and 38 (07 1971).Google Scholar
7 So, for example, the 3 July 1972 Columbus (Ohio) Dispatch, p. 15A, col. 7Google Scholar, reports the impending closing of a rubber plant employing 300 managerial and 1,000 production workers. The managerial employees are to be offered jobs at company plants hundreds of miles from the plant to be closed.
8 Plans now make provision only for ‘cold-storage’ vesting, i.e. the funds representing the value of the credits vested stay in the fund where earned; they are pegged at the value placed upon them as the plan existed when the employee separated. They do not participate in subsequent increases attributable to the same years of service for those who stay on; such increases have not been uncommon. Cold-storage credits do not reflect earnings that exceed the modest rates projected by conservative actuaries, increases in productivity, rising standards of living, and gains from separations without vested credits. Were the value of vested credits ‘portable’, they would participate in such improvements in the plan to which they are carried. In my judgement, a central clearing house is the most trustworthy repository for the value of such credits. It would be operated solely in the interests of participants and enable.them to obtain the fruits of rising productivity and standards of living. The clearing house proposal is gathering support in the United States, but slowly.
9 Attributed to Director of Group Annuities, Equitable Life Assurance Society of US by Boyce, Carroll, How to Plan Pensions: A Guidebook for Business and Industry, New York: McGraw-Hill Book Co., 1950, p. 69Google Scholar, cited in Mittleman, Jonas, ‘The Vesting of Private Pensions’ (unpublished dissertation, University of Pennsylvania, 1959).Google Scholar
10 United States Arms Control and Disarmament Agency, Post Layoff Labor Market Experiences of the Former Republic Aviation Corporation (Long Island) Workers, pp. 10–11 (1966).Google Scholar
11 Derived from Gordon, Margaret and McCorry, Ann, ‘Plant Relocation and Job Security: A Case Study’, Ind. & Lab. Rel. Rev. (13 10 1957), p. 11Google Scholar, and summarized in my Future of Private Pensions, New York: Free Press; London: Collier-Macmillan Ltd, 1964, p. 93.Google Scholar
12 Ibid. p. 97, derived from the files of Samuel Hill and Frederick Harbison for their study Manpower and Innovation in American Industry, Princeton, N.J.: Princeton University Press, 1959.
13 Blankenship v. Boyle (D.C. 1971), 77 LRRM, pp. 2140, 2146, 329 F. Supp., pp. 1089, 1096.Google Scholar
14 77 LRRM, p. 2159, 329 F. Supp., p. 1112.
15 Congressional Record E11071–11073 (29 December 1969). Other examples are presented in the pages following those cited.
16 Social Security and Welfare Proposals, Hearings before the House Committee on Ways and Means, p. 250, 91st Cong., 1st Sess. (1969).Google Scholar
17 ‘New Approaches to the Housing Crisis’, Speech of Hon. Wright Patman, 22 December 1969, Cong. Rec. (daily ed.), pp. 11071–84.Google Scholar
18 1971 Statistical Abstract of the United States, Table No. 688.
19 While union interests differ from those of employers, they also differ from those of employees. Unions seek to bargain for ample-looking benefits; to achieve them without using up the entire bargainable ‘package', they must agree to eligibility conditions that exclude large groups of employees. As ex-employees in this country tend to be ex-members, union solicitude for the separated worker has its limits.
20 As I read the British White Paper, Strategy for Pensions (Cmnd. 4755, 1971)Google Scholar, such a result could take place to a limited extent under the arrangements proposed. Assuming that the occupational scheme's benefits and costs exceeded those of the state reserve scheme, when employees were separated without vested rights in numbers larger than planned, the scheme would generate such gains reduced, of course, by the contribution for such employee's service required by the reserve scheme.
21 So, the June 1972 US Senate Labor Committee hearings on the Javits-Williams bill resulted in not one line of type in the New York Times, ‘the newspaper of record’, and but one paragraph in the Washington Post.