23a
20a 22a 15a 19_
14a 16a 19b
18a 21a
5
16 b
U
'0 21b
iSb
13
20b
I; U
23b
17b
EBRI
14b 18c 19c
Table Table 7 9 22b
m
Appendix I 7
k @
Summary 52 3
612 IO II 424
Statement 89
, _ A-24
°,-I
u EBRI 6
over 50 million current workers, must be based upon an accurate
called the pension tax expenditure. But this
estimates." The literature indicates that this debate has been
Table 3
expenditure. Munnell Whthen at Are undertakes Employee Benefits? a partial equilibrium
9. How disMuch cretion ofary Pension-Rel Employmen benefits ated t thaTable at nd Tax Table pr CooDeferrals ver vide 5 age 6 fin or is tthe heLost deferr to athe l oTreasury? f salary until
• Retirement, health, life, and disability benefits are widespread, with
Endnotes: Should you wish to review the primary economic research on which
assessment Private ofretirement costs and program benefits--as tax expenditures should form all the debates. single largest No
growth Mr. Employer between Chairman, contributions 1980 I amandpleased 1982 to of tax-favored to employer appear before health benefits-those theinsurance Committeethat contributions today are to notdiscuss taxed as a
and pension advance OCh in ther art increase the contribution funded em Ifuture. pprovides loyee programs isand Surveys was due information fringe represent otover ofthe b2employers enefits 7 percent. on other their prevalence now indicate provisi only , Health, aosn.real afor that matter life, the savings. a changing primary oand f ladisability w, Asbenefits work have a result, force, to add be of
insurance In Employee 1983if health it benefits was not insurance, such available as according defined-benefit from an to employer thepensions Treasury, and largely andrepresented health paid for insurance by a tax the
m Appendix II
Table 4
ongoing, present spe value but cial Ineeds Mexercise will aagre riseethat (loans thatapproximates athe nd hIssu ardship), e Brief a or lifetime until was antermin estimate. addition ation of
ERISA Work Force by Industry, May 1983
Table l0
Z _ _ _ _ _ _
this statement between 70 is based percenttheand following 83 percent are of suggested. full time workers over the age of
.,_ I_
time spent attempting to get to accurate numbers can
Taxes
W
employment, generally pay benefits as a lump sum, and for which taxes
She produces 25 covered. a high number Distribution and concludes: of Workers "Thus, the revenue
to the debate. Munnell then mentioned that "a primary concern
Employment Coverage and Vesting:
0
category of tax expenditures in Table the2 federal budget. They arise from the
more. as employee current This benefits. income would mean to Following thevery employee--can significant these hearings beemployee dividedI tax would intopayments two lookgroups: forw outard ofbenefits current to an
changing retirement, research share employer. of industry indicates total life, compensation health, structure, that sickness, eachand may dollar international and reflect contributed disability the competition, maturation fortomedium a pension are ofandgroup combining large increases health firms to
legitimately provided expenditure are •almost Theon always of a cross benon-discriminatory approximately labeled discussed section "an as$17 aapproa unproductive flat basis. billion. ch dollar While used This costdata digression." financed per in is employee thenotapproximately budget available, or Those as a level this $77
Method Used Q O m ........ Taxes Lost Deferred
loss Employeeassociated arebenefits deferred represent with until benefits the virtually favorable are re any ceived form treatment (in ofcluding compensation cof ontributions pension that to is
of EBRI was that the figures • •published by the Treasury jumped
Low, Average a_nd High Baployer Contributions to Discretionary
W Covered Distribution by an byEmployer EarningsGroup for Health
eFor background on flexible benefits plans and their relevance to
Statement On
0
who feel offsets that a call this for year's facts contributions is "an unproductive and earnings digression"
Employer Outlays Fanployee for Emplo) Benefits ,ee as Benefits a Percent of in Totathe l Compensation, National 1982 Income and Product
some _J profit sharing plans, thrift-savings plans, and salary reduction
contributions provided INDUSTRY in a form and other earnings than Employment June direct is 18, substantial wages, 1984 paid regardless forPercent in whole Covered of or in howpart it by
dramatically'"D and Composition apparently of Employee Benefits without by Benefit explanation Group, 1982 from year to
Insurance Plan by Personal Earnings, 1982 a/
changing • Nationally employee NonaKricultural an needs, averageWaKe of see 4.6 andDall percent Salar as y L.Workers, ofSalisbur wagesMayand y, 1983 salaries ed., America is spentinon
income.Summary of Cost Factors by Age for Use in Costing \ Benefit Plans
deferral opportunity of totaxes provide paidadditional on: (I) assist pension ance andto retirement the Committee. saving contributions
on which taxes are deferred and benefits that are tax exempt.
put among requirement aggregate coverage an full-time effective and national likely benefits, workers. lidmeans savings on excessive as that by Health, well distributions at least as future life, employer 35employee and cents. aredisability efforts similar. benefittoprograms growth. contain are the provided cost of
billion in benefit payments. In 1983 employer-sponsored retirement programs
cannot percentage Tenth,bewhatviewed oflevels pay '_ Accounts as or per m limits objective employee. eu[or would Selected • analysts. have Employee Years to ,berepresentatives, 1950-1982 placed Thus, onMunnell benefitemployees, expenditure_ should and
against benefits paid this year. These numbers
year." is measured." plans). (O00's) Pension Health
the employer, even if provided by a third party. Generally, media articles,
voluntary tax exempt benefits and 4.0 percent on tax-deferred benefits.
Transition: Implications II for EmployeeII Benefits (Washington, DC: Employee
DISTRIBUTION AND ECONOMICS OF EMPLOYER PROVIDED FRINGE BENEFITS
Employer Payments Employer Payments
be seen as an advocate for the policy positions she has
relate to different groups of people and fall to
Tre costasur surveys, y Methodand reports Total Worker lump all Total benefits Worker 83% together. Total Retiree17% But different benefits
Workers with Percent of
as a Percentage of as a Percentage of
Benefit Research J=: _ Institute, -- Number 1982);ofEBRI Workers r Issue(000's)_ B , •rief, .. "Flexible Compensabion
2. and Income (2) earnings Tax on 195these 0 contributions. 1960 The dollar 19'70 value of the 1982 tax
to private between • Tax-deferred health90 insurance and benefits 95 plans. percentinclude of these primarily full-time employer workerscontributions and retirement to
Seventh, represented to pre The Employee IRAs vent Committee how are further adoes expenditures atax vehicle employee istax expenditure tobase be forbenefit on commended erosion? voluntary a oftax-favored provision approximately forsavings. holding vary basis, this by They $50industry? however, billion. eare xploratory usedareby This hearing expected 17 financed million into to
employers have been. ,content Retirement with 2_/ this Insuranceapproach Benefits_-3/Dis.since _ Fiealth the actual 4_/ Grand distribution Total
articulated in her written work. Munnell has already reached
account for the age of the pension system or tho
serve different Benefit Groupsocial and economic W_Ees needs. and Sa]arles For legislative All Benefitspolicy assessment
The Issue Brief raised other concerns as well:
Employer Percent of All Workers
Again, Earnings • These Munnellbenefits Employment cannot il are L provided support Coverage across her Totthe al numbers Ves salary ted Benefits or range, her with conclusion. most going to
and Public Policy," no. 24 (Washington, DC: Employee Benefit Research
Total Total Total Total
Before the United States House of Representatives
Industrial Classifications- Low Avg. High Low Avg. High Low Avg. High Low Avg. High
her conclusions without aid of accurate estimates of the cost
Lifetime Method:
fact that this relationship will change in the
GOVERNMENT purposes, benefits can be classified 11,905 into at least nine 88.26%categories: 88.73%
A Comment on the Controversy Over
By using middle-income the current households. levelOverof 75 contributions, percent of those investment with coverage
Institute, November 0 Amounl II 19 Com 83); peCoverage nsnlion and AChapter mobu/ nl Co II mlX )cn XII ._a Workers , tlon "Flexible Amotwithin mt Co.]pe Compensation n.qnllonwith Amoun Employer l Plans" Compen._llon
expenditure demands that equity and efficiency questions be explored (see
-,4 r" E_ rq CO 0 r_ (_,1GO 0_
employee continue The retirement same benefits to grow. alternatives income andThese theCand oare mtax "salary mitt capit available. ee code. aolnreduction" Waaccumulation The ys an In gener d the Mea afeatures lnsincome tplans. ax tre were tax atment These area a part of constituted as employee well, of thea
programs approximately persons Retirement "Fringe" astocompared 82benefit $87 program percent. billion toexpenditures over coverage, Information in 50 million retirement as haveshown iswith not notbenefits pension in increased collected Chartcoverage. paid I0 significantly onand the in Table 1983. fringe Over 13 7over ,benefits Numerous million varies this
of cost Meeting does the not objective affect either of avoiding the taxesanyto further be paid tax by the baseemployee erosionor from the
Nominal dollars a/ 14 86
of the future. pension tax This incentives overstates and the without tax expenditure the factstoday on the
Type or Bcnefll Petroleu_ 6 Refining (I]llllon.q)8.6 11.2 (l'crcclll)13.9 (IIlll6.9 lon_) 9.0 (l'ercenl) 11.2 .7(Billion .9 s) 1.1 (Percent) 16.2 (Billi 21.1ons)26.2 (Percenl)
• . • ".. -., _ ,
earned less than $25,000 in Defined 1982. Benefit Life Insurance
earnin Total gs Total andBenefit benefit Payments 80,289 payments, 47372 Munnell 32.5 27assumes ,603 I00.0that the system
Personal • Budget Earnings deficits(in millions) might cause Earnings pension Group policy toCoverage be
in Fundamentals Tax Expenditure of IIEmpl -,I"_oyee _Estimates Benefit _ IIPrograms c,_for ._ Pension (Washington, Plans DC: Employee
Subcommittees on Social Security and Select Revenue Measures
Real dollars b/ 28 72
benefits and thewill system _ understate IIprovides. 0 _o r-_it 0 thirty EBRII_ is GOyears ¢_doing from overnow. $I million in
DURABLE I. MANU. legally required benefits 8,492 (including employer 79.84 contributions 94.17 to
$1-4,999 Benefit Research Institute, 10,014 1983)2. 433 358
Legallywill mandatednever benc[its chanMedical ge. Demographic Cost Cost Factor changes as in Cost the asfuture % of will
made based upon considerations of perceived cost
Electronics Revenue Appendix (Appliances) Act II for of 1978. a brief 6.0 7.6 Anddiscussion 9.2contributions 7.2 of 9.0 the 10.9 totax Individual .5 expenditures). .6 .7 Retirement 13.8 17.2A major 20.8 Accounts new
benefit about programs 4.0 percent has beenof wages relatively and salaries consistent in 1982. over time, Taxationwith of health these
research considerably 30 IRA (education, employee year holders goal Legally benefit period. of studies also legal, Req "no by ulred have and further Government industry. have Employer van fringe pension pool) been Payments erosion" benefit coverage. data :The undertaken because shows expenditures lowest would very 9.5 that to lead coverage small expenditures assess to could numbers inequities levels be the 29.2achieved degree of areare employees and less infound to toathan number which major are in .5
Q
employer. Discounted Asforainterest: result, cthe / only attention given to date to actual per
research each year to get the facts. Whatever they are, they
Primary Social Metals Security, Medicare, 702 unemployment 89.81 insurance, and 97.70workers'
• without Studies by sufficient the Treasury consi and dbyeration private economists of benefits indicate that
$5,000-9,999 _ 15,323 L 0 k 5 747 k 2,023
guarantee that Factor this asassumption Dallas % of L. %Salisbury of is Average wrong. * Further, Pay for One Munnell's
Social Security (FICA) 5.2 16.0
September 18, 1984
Social Security Old-Age
Office a•t Equipment pension The (includes current ._ r_ate method of calculation I_40 _,-_ counts60 as pension
areAutomobiles broadlycompensation distributed. insurance); They 823 will, in time, 92.56 provide the 98.41basis
Loss benefits Unemployment enhance Compensationtax equity I.i and that I.I taxation 41.2 of3.4benefits would 0 5 have
$10,000-14,999 provided. 17,82 o 7c 10328 5,484
new calculation is still partial equilibrium and has all the
studyeFor by Sophie furtherKorczyk analysis assesses of the thesetaxincentives treatment inissues, a lifetime see context. Sophie M.She
_Q
covered percent insurance (IRAs) Ageindividual Group are benefits by ofbeing expected these wagesworker isprograms. tax and Average deferred tosexempt alaries. continue andCost until organizational and toretirement the growemployee also. Costtransitions. andwithdraws capital Times funds accumulation Table from Pay2 the shows programs plan.the
Survivors contributions construction, of computers) ways, There and butarenone to retail also would retirement 5.Idifferences trade, be 6.5 simple. 7.7programs, and 7.6in business 9.6 what over 11.3 these and $I00 .6 professional programs .7billion .8 13.3 provide, in services. 1983, 16.8 19.8oraddmust The to
employee ca cost variation has been undertaken very recently to assess: (I)
at feder Workers' al raCte ompensation 36 0.9 64 2.8
for informed decisions on whether tax incentives for pensions
tax the most expenditures adverse effect amounts on the that lowest would earners.not be taxed in
$ I-$ 4 999 29.5 53.3 18 4
$15,000-19,999 13,101 9 422 5,874
weaknesses that the budget attributes to the Treasury numbers.
Korczyk, Retirement Security and Tax Policy (Washington, DC: Employee
Other Legally Required Payments a/ 2.3 7.1
Disability Insurance $1,3 0.8 $5.6 1.9 $16.2 2.6 $69.2 3.7
are Industrial NONDefficient URABLE and Farm MANU. and effective. 5,862 They have already 72.56 provided 90.52 a
2. the discretionary absence of benefits pensions that due are fully to other taxableprovisions (primarily,ofpayment
5 000- 7 499 10.8 64.6 8 1
$20,000-24,999 Benefit Research 10,283 Institute, 8 1984). 159 See 5,641 also EBRI Issue Brief
finds • that Tax the expenditure economic value toestimates the of government could is significantly be used greater than
Under I. 30 FICA 80.0% 23.0% 0.1%
being•Not Expenditures tax Taall x-exempt deferred. workers onbenefits all are Theother with taxinclude medium employee treatmentand employer andlarge of fringe fringe contributions firms, benefits benefits however, combined istosoingroup wetransition, are musthe small, aalso lth
Social national highest provide, Fourth, Security average Hospital how levels savings. under much level are current doabove The costs in most the law. which vary pessimistic chemic by These contributions industry? al, differences primary of these would metals, studies affect haveand the concludes topublic be degree taxable, that employment to there which and
approaches to health care cost containment and (2) possible disincentives to
Equipment for time not 7.worked); 5 9.7 13.6 7.8 10.1 14.1 .7 .9 1.3 15.9 20.7 29.0
Apparel Discretionary Taxable Benefits: 697 13.9 45.82 42.8 75.55
basis for the more code complete such asunderstanding capital gainsthan tax was deferrals, possible when
7 500- 9 999 9.1 74 1 7 9
Munnell $25,000-29,999 • FICA concludes taxes could 5,515 her benote lowered with 4 365if the benefits comment 3,048 were that: subject to "The FICAdebate tax. As
"Pension-Related Tax Benefits," no. 25 (Washington, DC: Employee Benefit
The "_ United inappropriately States Treasury as indicatorsmakes of 0annual revenue estimates that could of tax
Insurance a a a a 2.3 0,4 16.4 0.9
Time not worked b/ 9.8. 30.2
._ _ .,_
Chemicals 970 91.89 97.38
Munnell SOURCE: 30-34 reached Sophie M. herKorczyk, conclusions 80.0% Retirement in 1981. Security 33.0% and Tax Policy 0.1%
I0 000-municipal 14 999 bonds, 19.0 the elderly real 84 7 estate gain 18 8
Pharmaceuticals $30,000-50,000 the maximum 6,611 7.4 taxable 8.8 wage 9.8 5 8.1 b547 ase 9.7rises, 10.8 the 4,0 .8 72rate .9 1.0could 16.3 be 19.4decreased 21.5 as
Research Rest Institute, Periods December 1983); and EBRI 3.8 Issue Brief 11.7"Employee Benefits
over lookingthe beat precise gained tax expenditure bymagnitude changes numbers of alone in the the wouldtax tax imply. expenditure treatment As much asof72 is percent an
with areas.addition insurance al "sunsets" and a variety ahead. ofNearly smallerall benefits current American that include workers dental have
Unemployment expenditures Table Insurance 4 shows in how 1.5 response such 1,0 caps to would mandate 2.8 affect 1.0 ofdifferent the 3,5 Congressional industries. 0.6 17.4 Budget 0.9
is employer-sponsored as lookashown The 35 at percent the cost by Chart total ofaddition, discretionary 3civilian plans and Table or andwork $35IRAs 2, billion employee force. and "complement" these inData benefits 1983. expenditures collected Social variesSecurity byare significantly thenotBureau in expected terms of from the to of
hiring a. or Akeeping ny expenditures on olderbeyond workers. those now These beingrecent made would studiesbe subject show very to
(Washington, DC: Employee Benefit Research Institute,
3. discretionary benefits that insure the employee against financial
15 000-exclusion, 19 999 etc. 14.3 90 0 15 1
$50,000 well. and Otherover Taxable Current Benefits 1,615 government _/ 1 371 estimates 0.3 overstate 1,106 0.9 the amount, however,
and the 1985 Reagan Budget," no. 27 (Washington, DC: Employee Benefit
pensions without reference to the limitations
Worker's unproductive Act Compensation of 1974. digression These 1.0 estimates 0.__.66 that1.9 arediverts 0.7 published attention 4.7 each 0.8 yearfrom 19.9 in the the 1.1
35-39 _--80.0% DallasL.L. Salisbury* 48.0% \ 0.2% i
Chemicals 10.1 11.6 1S.0 8.5 9.8 12.6 .8 .9 1.2 19.4 22.3 28.8
1984).
TRANSPORTATION risks and are tax 1,454 exempt (including employer 68.98 contributions 86.56 to
20 000- 24 999 10.5 92 5 II 3
Researchbecause Institute, of the Febru assumption ary 1984). that benefits will continue to grow until all
of theinherent real (i.e., in inflation-adjusted) the numbersPreswhich identvalueareof outlined taxes deferred in the during the
important experienced topic the present of whether tax treatment the favorable of primarytaxbenefits treatment for their accorded entire
President's grow significantly. insurance, Budget . childalong r-._ care,withmerchandise many cautionary '0discounts, 0 notes ,M and c" employer-provided on how they
Finally, retirement Census significant employer Chartin Discretionary what toI0 income May cost employer, and is1983 variation provision. Tax-Favored the Table for relationship even 7EBRI Benefits: byindicate within ageand(Chart industries. the ofthat employer U.S. 139.0 health andDepartment Table Further, sponsored insurance I0). 27.7of there benefits provision Health is significant and toissocial Hum more an
Total ProposalsFICfor A $3.8 tax. tax reform, This 2.4 would therefore, $10.3 mean need that 3.6 to on be average $26.7 carefully expenditures 4.4 scrutinized. $122.9 above 6.6 To9
(ex-railroads)
health, life, and disability insurance plans);
40-44 80.0% 69.0% 0.3%
25 000- compensation 29 999 is paid as6.8benefits. 93 6 7.5
Munnell then quickly notes: "On the other hand, the revenue
Paper, Fiberc_ and Wood Percentage Distribution o Within Income Group
budget. Contributions _'_ 0to pension 0 c_ and 0 O0 -_ O_
contributions to private pension plans represents an efficient
Employee Benefit Research Institute
can legitimately be used.
a/ Before adjusting for inflation.
Products 7.5 9.2 10.3 8.0 9.9 11.1 .9 1.1 1,2 16.4 20.2 22.6
Voluntary 30bene[i 000-ts 34Profit-Sharing 999 Emplo Plans yment d/ 4%2Covered 4.0 % Vested 93 0 12.3 4.6
loss for _ public _..,N _plans _,n"*_"is almost 0 _o certainly _-_ underestimated since
pension eForparticipants' discussion ofworking the interrela career tis ionship ultimately of programs repaid assee income Sylvester tax during J.
proKrams?
andconsistent careers. eq45-49 uitable meals.across Theseuse These workers industries, of 100.0% benefits scarce havebut constituted feder come thatalto variation 100.0% resources." 4.6 takepercent the does presence of exist. wages0.6% Rates and of salaries social of over and 9in7
Ser the Sixth, variation vices Social Does degree which provides this among Security the employees costindustries. full this variation onlyby information taxation pays salary make benefits During range ofafor tax these 1982 receive as retirement policy a programs stream total employee difference? and average of as monthly health benefits? income expense The programs. benefits. answer rests ranged will on from the be
percent of wages and salaries would be subject to FICA. But it
Group Health, Life, Short-Term
b/ After adjusting for inflation.
CONSTRU 4.CTIOdiscretionary N benefits 2,1 that 30 help the employee \ 44.56 meet special 71.9needs 3 and
35 000- • Econometric 39 999 studies indicate 2 3 that taxation 93 0of benefits would2.5lead to
these funds are not fullyto funded Employed and tohence Employedcontributions are
I
Food Schieber, Social 8.3Securit 10.0 y: 11.6 Perspe 8.2 9.9ctives 11.5 .7on .9Preservin_ 1.0 17.3 the 20.8 24.1SystAm
• Dramatic increases in the numbers which were
Disability Insurance 4.4 13.5
Private pensions and
A reading of academic, public, and other publications leads one
_/ Interest rate used to discount taxes paid in retirement to
are tax exempt (including employer contributions to child care and
40 000- 50-54 reduced 49 Other999 Tax-Favored availability, 112.5% Benefits e!2but 3 the 146.0% exact 0.6 extent 90 8 cannot 1.8 1.0% be established. 2.5
retirement. (Washington, DC: Employee Benefit Research Institute, 1982).
less than accruing benefits." Whether under Social Security,
1982.
The toemployer-pro problem the unexplained vided irrefutable is that employee might oneconclusion benefits inappropriately can only for assess granted: that bethese whether including attributed cautions benefits the to currentare aretax
pro[itpercent assumption yes 12.5 -sharing Primary Employer-sponsored Chart Social ifto employee 29.0 are 2Security, that benefits and percent found they benefits 1.7 Table employer-sponsored are will in plans ofI 1.1 were broadly total primary continue show are _.tocompensation that 4.9 ofbe distributed metals, to two subjected pensions, retirement exist, 1.6types: among automobiles, across research to and 13.1 (I) and income Fortune IRAs the those health indicates 2are .1tax income 500 chemicals, that complementary, programs orfirms. 65.2 FICA spectrum. only that ta for and pay are The 3.5 x.
would also mean that any new plans established would be subject to
Utilities _ 0 7.4 10.1 12.6 6.9 9.5 11.9 ,._1 1.1 1.S 1.9 15.4 21.1 26.4
PUBLIC the UTILITIES year legalofplretirement. ans); 811 93.11 95.30
Total 100.00% 59.00% 34.38%
50 000- 59 999 1 1 91.1 1.2
civil service Further, itretirement, is impossible tomilitary assess how retirement much higher direct or expenditures private
Federal, state, and local
a changed pension system rather than inclusion of
sufficient to justify the cost, if one knows the cost. The tax
frequently 55-59 0 Summary:unheeded. _125.0%For example,216.0% (Msome 0 use them 1.5% to indicate
$1-4,999 I00.00 24.29 3.57
60 000-might 74.999have to be to accommodate 0 7 these cutbacks. 88.3 0.7
Life Insurance eAlternative tax 8.1 sys 12.5tems 1S.O would 6.0 9.1 require 11.1 detailed 1.0 1.6 2.0judgments 15.1 23.2about 28.3 the
pensions, Chart 12 theandconcept Table 9 that show that the Treasury tax expenditure tax expenditure should statistics, be
treatment Legally of primary Required Employer employerPayments provided and benefits.
government expenditure Failure public employees' would topensions distinguish be lowerforfor among theveryfirst theyoung growth time. and small of legbusinesses. ally requiredChart employer 5 and
favored millions communications, working prevalent, Charts benefits6pension together as and ofparticularly a7workers stream and while plans to Table of business they assure among monthly will, 5 will show those retirement and benefits--most th according not. atpersonal working nearly Further, incomes. over 83 services todefined-benefit percent 1,000 government taxation firms They hours of all could provide are per nonagricultural estimates, plans not year. lead for and perfect to Among 59.92 some an
the Employees revenuewould FICthat A beginning comewould to with recognize be gained the first thebydollar inequity the ofgovernment expenditure. involved inifpaying the law taxes
COMMUNICATIONS 5. discretionary benefits 1,200 that have traditionally 88.75 been called 97.46 fringes
$5,000-9,999 I00.00 37.51 13.20
75 000 60-64 or Discretionary more Taxable 160.0% Benefits0 9 323.0% 23.5 86.2 72.0 2.3% 0.9
caltreatment culated ofon various the benefit sources accrual and uses of rather income.thanBoth contributions would also create is
retiremen t pl arts 1.1 0.7 2,9 1,0 7,8 1.3 33.8 1,8
pay $87.5 billion in benefits to retirees in 1985. What should
Banks 11.4 13.9 1S.O 7.2 8.8 10.0 .7 .8 .9 19.3 23.5 26.8
were changed. The Budget points out that this is not a proper
All Discretionary Benefits 23.0 61.5
$10,000-14,999 and are intended I00.00 to meet 57.93 employer 30.76 needs and are tax exempt
• Imposition of limits or caps that would "prevent further erosion of the
revolutionary. some formidable implement Under atsuch ion and a new transition approach problems. the Social These problems Securityand
Group calculated health insurance on a cash-flow 0.7 ' 0.5 basis, leave 3.4 the1,1impression 12.1 that 2.0the proportion 65.7 of 3.5
payments, substitutes defined-contribution Tax lawsfully in favoring terms taxable plans specific of benefit such employee employer as delivery, TIAA-CREF benefits, retirement and but tax-deferred (2) change andthose heain lththat oneinsurance benefits, make wouldoneeffect plans time and
this unintended percent. wage Table full-time and be4 Fsalary uHealth present measured lly employees age Taxable discrimination workers insurance data Benefits over aga earn for inst? the is the age less generally effect of Fortune than $28 25, if$25,000 the health 70.01 13.9 billion; 500 first percent per for insurance benefit year. twelve $50 are 42.employers were 8Pension covered billion; different given by coverage provide. an aindustry pension $62 income and
The use without Issue 65-69 of b. reference the Brief Anynumbers expenditures then to225.0% theexplored because, truebeyond economic the among the value question *current other of the national of reasons, benefit whether 2.3% average being they orpro would not vare ided. be
MINING 660 82.72 96.43
(including employer provision of purchase discounts, job site
$15,000-19,999 I00.00 71.92 44.83
Total, All Workers c/ 112.7 75.9 o i00.0
Tax-Favored Benefits 9.0 ', 27.7 \ _
Retailing tax bases" would 6.0 7.1(a) 7.8 mean 6.2 that 7.4no 8.1 organizations .3 .4 .4without 12.5 programs 14.9 16.4 today
Group andissues li ['Medicare e insu,'aare n e_: treated tax 0,3expenditures in det 0.2ail elsewhere. 1.would l 0.4dwarf For a those 2.9discussion for 0.5 pensions, of emplo 7.2 yer 0.4
billion? Do all these numbers indicate that at this point the
the calculated figures, as as if presently no other published tax provisions by the Treasury, existed accurately and as if
cafeterias, special bonuses and awards, van pools, clubs, and
$20,000-24,999 I00.00 79.34 54.85
could establish them or (b) that all employers now with programs would
pensions in basic tax reform, see Sophie M. Korczyk, Retirement Security and
andcurrent tax-exempt employees taxbenefits deferrals would hasbe permanently greatly "charged distorted lost withtothe income" theperception Treasury that of is they the verymight tax-base large.
public vesting groups. and and 36.84 other pressures follow It percent statutory documents this for, currently pattern employee support significant with are for, benefits entitled 76and percent variation confidence were to of a enacted vested those ininexpenditures the covered benefit. under others. earning theOffor premise allless voluntary civilian th thaatn
Fortune Eighth, value "lump-sum" 500equal whatpato yare ments the the 5.1benefit ateconomic change 9.8 15.0provided, of effects 6.0 employment 9.8of which 14.1 taxor would incentives .3at 1.1retirement increase 2.0 for12.5benefits dramatically age20.6and29.0and thuswhat with may
reflect government This could thegets mlead subject