Chapter 3 SOME SIGNIFICANT FINDINGS Frankly, our thesis is that there are currently pension funds covering jobs where the pay is low and the turnover is high which for many of the participants constitute a mirage. We do not believe that our laws should allow the Internal Revenue Service to approve Trust Agreements which create these illusions of old age security. Those who believe that private pension plans negotiated through collective bargaining are based on deferred wages and not gratuities granted for long service must regard many pension plans in industries with a high rate of labor turnover as very questionable. Under many of our current plans in these industries, too many people in the economically distressed segment of society will never collect their deferred wages. To illustrate our thesis, we selected for study, some pension plans collectively bargained by a group of New York City locals whose membership rolls have been characterized by a high turnover rate. Admittedly, our findings are not based on the fullness of an actuarial study because we did not have that access to the membership rolls which would allow us to make such a report. Then again, our experience leads us to believe that many of the local unions in the category under consideration would have been hard pressed to supply the information needed for such a report. Then again, our experience leads us to believe that many of the local unions in the category under consideration would have been hard pressed to supply the information needed for such a report. Common sense, however, does indicate that when the membership turnover in a local is unduly high, one can be reasonably sure that the vast majority of the participants in such funds will not collect any pensions because they will be lacking the years of continuous service needed to meet the eligibility requirements. What constitutes a dangerous rate of turnover we have not attempted to say. Maybe a standard vesting requirement would more simply and more effectively solve this thorny problem. So that the purpose of this study will not be misunderstood, we have elected not to identify the pension funds studied by name. Table V Table indicating the number of participants (employees for whom contributions are made) found in the Pension Plans under study, the total assets of each plan, the amount of one year contributions from contributing employers and the number of persons receiving benefits from each plan. Unless otherwise indicated, these are from the 1962 reports. Z - These are average pensions and were obtained by dividing the reported pension expenditure by the number of pensioners. Table VI "Continuous Service" TABLE SHOWING ELIGIBILITY REQUIREMENTS OF COVERED EMPLOYEES FOR LABOR MARKET REVIEW of April 1963, published by the New York State Department of Labor, Division of Employment, Research and Statistics Office, reported that in 1962 there was a total of 7.2% of quits and separations in manufacturing in New York City. No figures were available for the service industries. |