Table lit 14 - AP_IX I I Table I] 27 3 (3.) BENEFITS _4JAL SPOUSE'S BEneFIT PAYABLE AT AGE 65 34 38 TABLE 1 44 30 40 21 33 37 28 39 I0 19 31 29 oO 41 36 22 CONq-EhTS 6 75O 45 35 26 48 25 24 52 525 49 117 812 43 18 417 15 49 20 46 SU_IARY 42 16 13 O_ ASSUMING VARIOUS AGES AT DEATH A_D SALARY LEVELS 2 oO ments or institute more restrictive provisions - APPENDIX in I cO to accentuate the effects of women's increased labor force attachment. Two because they never worked, or worked only a short period during their life. 5LIb_RRY OF (RRLIFICATIOK_'_'S AM] TEgtIIRATIO_ Ox TABLE 14 totally I. Replacem within etheir nt Rate fertile Analysis POTENTIAL years. There INCREASE were approximately IN ANNUAL 7.6 million LUKP SU!,I VALUE OF DEATH BENEFIT according differences vesting opportunity a t high oatthe probability ageMarch for thirty 1980 regulators insuggests Current their respective Population this to group work influence Survey, of women careers37 willpercent isplan benefit notc0 soof large vesting e little lderly it woul employment d deem experience the employee other date towar on plan ofdapprove the hire characteristics, endd maternity or o£ their age normal or22,paternity working retirement serviceleave ages.for to benefits have Table benefit 5 most of these women, their work pattern in their current job is remarkably participation cend onsistent of their andworking and sustained recipiency lifeattachment toamong earn athe to pension. elderly. the workforce. Even Table whereE2vshows en today's under that elderly Social workerwomen facts effectively modi aSLNMARY retroacti plan fied. . vein ........................................................ This Co As1979. verage Under service these orequires ,,I required Another ERISA refers consistent t,"l credits information. I'-..a oto xbreak 5plans xD .6workers are million trends in granted either (" ser ,4whose TABLE continue vor ice .._ 14 _ under employers 3 C) occurs percent toto the vest evolve, when plan. _of spon working ,.-._ participants a sThey plan _the or_.-dachanging participant often pension women are 1were role plan. fully nothas of no Survey are Vesting that gathers in itamay Pension information cost private Plan onsector the prevalence employersofasthe muchreceipt as $i00 ofmillion pensionsper andyear the information result options regulations. their not these plan.dear bills 2.2 in Ccan ermore million a tainly provided priori then improve I/equitable onthe all slightly which retirement the by women story special retirement distribution type more is willsomewhat ofEBRI interests no than plan income tincome prefer TABLE half, owould different. f pension in levels. security 54.5 one 1be advocating more type percent contributions ofeffective of These older plan that were women. ofactors particular women. vfor er andthe women. more While At other. should thethe accrual should provide both. oconsider Between aof Little Better more any comprehensive pension 1965 commu is empiri whether and cn alication righ 1974 evidence tittakes and private is andworth accurate utilization some is sector, available substantially period picture paid of of onjoint worker of time. thepension increasing and relation Evesting ven survivor ship recipients' ifbpension mrates alloptions between such more income the competitiveness. defined I_)MEN most AND benefit recent Some P_SIONS analysts available plans Thiswith clooking osts statistics more /_mericans at thancurrent on 100jobs, recent particpants pension reducing pension recipiency intax participation 1977 revenues, that levels hadand among levels. been older set not Appendix were operate just II). embarkin in a Table gvacuum. on 13a shows career. In fact, the Nearly relatively TABL there E 10 is 58 a percent higher long history death of the benefits spurt of taxinand that would Mr. Namber (3",Chairman, of ii -.,.I" k'_ber or ("3it ,,.0, ofis .more --d a Nepleasure t h_ber participants, t_ TABLE _O for t" In ,,lc9 re _Oasethe inEmployee Net uwe -_ ,.--_estimate t oDBenefeit C) Research that most provisions. This CONTRIBUTIONS section reviewsUNDER theSHORTER evolution VESTING of federal EXPRESSEDAS A PERCENTAGEOF EI, provisions. If some o£ the more The arcane proposals arithmetic offered of defined two benefit safe pension harbor plans options: 0_, _ Ox 0_, C) O_ c_ Period proportion adopting O.Lalification of shorter all Termiparticipants natiovesting ns of Plans canTABLE who be NumbA-I can er 40 of expect to Plans 50 Anpercent nu to al receivehigher a planfor sample of •300 First, profit be weighed it sharing estimates along plans TABLE withthe3in alternative required 1975.!/ contribution Because plan formation, many for uThese "_ c-,,l analyses _ o.,,u-_ (_,-, assumedgBR[ r-. that oh c,.,t_,-lthe defined _ 0 _D (:x3 benefit plans had working after PATIOSwomen approximately OFbenefits between BENEFIT participants these AC(_UALS from ages two UNDER inshorter who and 1979. AHYPOTHETICAL one-half separate Women vesting who years before DEFINED had been outweighs BENEFIT of with i0 service their years PENSION the of -- benefits This will analysis •varythewith plan was the conducted sponsor generosity TABLE through by _idinger 5ofa reduction the forplan. EBRIin(Table Table profits; I). 2 It regulation affecting vesting and identifies a range of year families from the vesting, were break-in-service receiving the average at provisions least increase one pension that do would where not continue the be family approximately service head was accruals. between 2.4 performed is still highly twentypercent participants significant. hours membership. ofwas service used; estimated As for atheresult, employer in step even per week, oneif who for vesting up would to occurs not shows stable. the Women numberwith of years stableolder work women patterns in 1977 will had gainworked little, when if they anything, were between from periodic prior participation had worked todistribution ten the OXrate to majority years .-shorter _in 1940 ¢of '_ r'-had of c'service was ,,I not servlce a about large done Ox with twenty-five so Oworkers number usince "_ _full O theof -- vesting times _passage the lump c'_the Oxhigher occurring of ¢percentage 'Jsum ERISA benefits costs andof after many ot had Ending women annual granted INTRODUCTION more (i) thin an Ru levels adoption ling pri the so 500 r ................................................... towork of to hours DCIVILIAN atebenefits. that force of oftotime ser Date is full _vice because going Interviewers' in durin vesting LABOR effect tog funding expose FORCE O averplan Pafter instructions reof them vio PARTICI us year theto PerP as three credit ioATION dthe defined Gand pension rowtcan hRATE years training be for S system delayed accruin or 9 ,to g (2) a but amuch a efficient Security benefit, information covered Certainly tofirms' file Asby these Participation evidenced any operation one aclients. on especially worker plan cannot reports. current but byof less look the not refers the utilization If than Consequently, recent at yet pension these among the to participants. fifty workers Social current reports system rates years moreSecurity who of population were in ofalthough joint have age mobile, pro _mong sampled vreform today iding satisfied and women ofson urvivor retired will retirement process, shorter small between a statistical age be women required options and the agreement plan income service service ages and isbasis, to draw data ofon have defined policies time The small unit prevailing these contribution beplans benefit data adopted. characteris were thanformulas. collected The plans for debate ticslarger have there of over their A were formulas Social plans. review work slightly Security patterns, that of The more and aannual are howe than federal large ver, integrated, 39 million contribution suggest employees numberwomen that of women standards administration areAnother might ERISA were looking burdens shortened help. not worker for only adjustment Note, in who established to order provide enters however, totoour increase for pension athat splans et immthe of ediate pension policy minimum inprevalence mid-age particip that participation pension will will of ation life make participation fare and insu by pensions somewhat vesting r.7 ance more the This increases be up levels firm than within provided surve age tripled, than and Industry y the social ,ESTIMATED by any based pension potential prior rising life aparticipation ofprogram plan category on the five insurance plan.establist_nent. from aTRENDS clearly assuming sample years expenditures. decline only also , (from of flawed IN 6.3 69 isand households no VESTED percent percent important in Appendix survey turnover vesting benefits However, had PARTICIPANTS, ofrepresenting data II). inall more explaining or on policies private from in than which mortality. the ten lower the sector present we patterns 1965-1975 acti now U.S. inverates workers must legal assessing civilian workers This of pension depend. of and toisfor regardless WORI_S FORAGED VARIOUS of service the 21 TO WORKERS age24 could of INWITH 19 the 79 SPECIFIED WITH expect worker.l THE/IRAGES toI_IPLOY]_S AT accumulate EMPLOYM_ LESS THAN AND potentially ONE illustrates regulatory pri Institute vate-sector WORKI_S indicates tolegislation the submit AGED employment very potential ,,.O21this low TO cx;that ...Tstatement 24 benefit during o0 define IN value 1979 the values _for the NOT late r_pension of the PARTICIPATING Lfor r_ .,. 1970s record. Tbenefits theenvironment. occurred current O", EBRI tIN "_that ¢age '3TH]_IR in is 00 firms aHistorically, 55 nonprofit, separated I_4PLOYHRS' requirement, with fewerthis percent; potential but, changesit could in federal be substantially policy. higher in individual The law explicitly Change from prohibits A. i0 Final discrimination Average Salary against $I0_000 Rangewomen >for inLow-High pension POTENTIAL PROBABILITY have • received INCREASE whether OF TURNOVER INshorter benefits ANNUAL GIVENCONTRIBUTIONS vesting, CURRENT under AGE tax priorAND incentives vesting not more than 15 moreyears. rapidly, the value of accrued benefits may POTENTIAL u._ _ INCREASE o._ _._ _. IN _ ANNUAL ,-_u"_ CONTRIBUTIONS ,-4 ('.'_io ,-_ _s worked considered: through, it O4(I) becomes benefit life insurance clear u'_increases C' BY q that AGEand FOR the(2) for SELECTED value lumpsum _ tshorter '3 of YEARS benefit distributions. service accruals r_ o3 workers is may may analyzed graduated be limitedhere vesting by areavailable probably schedule assets. representative that achieves As a result, of i00 allpercent portability small vesting plans, we workers. assumed These that It findings may contributions also raise increase several were the5 perent important number on of qearnings uyears estions of below about vested the increase required PROBABILITY to fundOF aTURNOVER shift from GIVEN ten CURRENT year vesting to representative DISTRIBUTION done the (3", overall plans with GD ,...4 _OF an indicates f". t.¢'_ impact VESTED age ,...4 _ '_'andon ,,-( PARTICIPANTS that service retirement the typical distribution SEPARATING ,-- incomes. 4 defined of benefit plan employer for five plan modest years participation. or benefits. moreRETIRSMENTAT were selected The AGE actual because 62 each impact womendepends had been with upon Dec. 31, 1982 YEAR -884AND ,936 IN THEIR 144,9]_V[PLOYI_S' 63 765,881PENSIONS PLANS 70,200 BY HOURS 10.1WORKED AND SEX vested participants and very significant not with change.reductions less than for tenageyears 45. of serviceT-22 would cases. the ages ofIn•sixt • the yactuarial POTENTIAL -five PENSION theaggregate, consumer andPLANS sixt cost INCREASE yBY -nine. through the TENURE, methodIN Among annual HOURS ANNUAL an -- the increase the WORKED cost elderl CONTRIBUTIONS individual AND yfor in families SEXprices all entry where defined induced the age fifty-twoAweeks. subsequentThe simulation first wouldthat eliminate we ran the computed break periods in service of nonwork for a worker over the these agesproWhere of vYEARS isions. fifty-one Table standards OF YearUNDER SERVICE: 6and Vestin@ reflects sixty. ALTERNATIVE and changing to: INTERMEDIATE Among categorizes those exposure VESTING Average over TURNOVER them ofeighty FOR women byonly ASSUMPTION by Turnover the the about world value AJone Rates ofin work often elderly INTRODUCTION last September worked recei 2, back v 1983 ing in benefits the 1950s for in that ornew 60s year. when planAs there theformation were program fewer matured, pension or this plans. employee percent. mostly unit of because benefit requirements of under UNDER the in Mgh theat ALTERNATIVE plan. turn least over This one 1950-1979 rates retirement can VESTING among be a calendar yplan. oAND unger Although workers. year, a plan total year or arrangements greater specifically THE at twenty-five they after least PROCESS may degree forty tenand OF not direct are tend quarters ACQUIRING than years sixty-four meet currently that earlier tostrict of oronly Abein ten PENSION service, cohorts wage offset regular years not statistical ............................. orof very of salary income women. by providing earnings common, lower positions is sampling The to credits be expansion benefits that and recorded who tests. tomay had the beoffor entitled been in be the sum the 9with quite pension longer ofto their the a security. the edited "facts" and These made is anavailable arguments essential Number to are first the based ofpublic step. on certain the In the evolution preconcei area ofof ved pension the notions U.S. reform pension andsuch Dec. 31the , 1981 represents service scanty a economic many standards nSocial three yrole condusions women the 81environment, of 6year AGE for ,but Security 9a 24 general should recent shorter AND also all vesting about beYEARS impression workers, specified example 1wage par 33the the ,644 vesting ticularly for optimal new OF base ofthat SERVICE: is which a 69 business the 5,68small and that in 1pension interested employers creative retire may i0 many failure plan percent LOWER strategies lead m widows 68,0 ent use must in 95could rate ofpension to TURNOVER adopt are statistics. above income higher suggests for be being 1a 0.9 progra women vesting approximately it. ASSUMPTION policy. left work itmin sThe isin schedule ttheir ha and impractical debate t oldtarge Because wage prime agethat over 4.7 t differently. While coverage. working accrual effective the in ofcoverage DOL retirement significan WITH the In pa research If United rtthey LESS among this tincome only States re staff THAN results pension tiremen stay security according and i0 tfrom ten participants YEARS various bene years the for fits toOFanalysts different women then the would SERVICE may same their inonly make under general. survey• industry UNDER experience occur this contact aturnover So One in 3smaller YEAR we cases have will option are analyzed rates. problem be where talking that similar is work each 19.5 plan beneficiary force, i. percent. We with Prior estimated thank ii As tnand to Iyou the or VO ERISA 56that for mandated O_more percent t"_ the ,,Doutside O,aparticipants opportunity ,.-4vesting had ¢_ (_'_ agriculture, more "_1' standards than to 0submit in twenty 68.3 1980 inthis ERISAbegan percent active had statement. participants an of all to accrual take civilian We offer effect forrate • accumulate nonpartisan, environment Private from has public participants, resulted aplans by thedefined policy higher relative in frequently research alabor benefit fairly the generosity organization costs; consistent earnings pay plan off orwith of pattern which accrued ofplan theeach sponsors ofbenefit model pension vested participant, research plan's plan formulas. benefits and I than 100 employees, and almost 55 percent of the growth occurred in trade and normal cost method was used for all the estimates; . benefit plans. Yet plans women their tohave UNDER shift vested traditionally ALTERNATIVE from benefits. ten been year VESTING less cliff Forlikely example, REQUIREMENTS vesting to receive in to going pensions five year from than A DEFINED CONTRIBUTION PLAN , related Most retirement defined benefit benefits. contributions plans To adopted the or extent a combination new that vestingUnchanging theof rules costs policiesto of Dec. 31, 1980 741,387 serviceAGE 120,202 workers. AND 62 SERVICE 7,586 Most PATTERNS 56,0likely 63 this 9.8 would occur •.heavily difficult weighted annual Ato towards number vesting operate of theproposals percentages end in of practice. the TABLE arecareer. included after OF CONTENTS This ten in pending characteristic years bills equals which should orare beexceeds intended • PD there are other FULL ways VESTING of achieving BY BENEFIT the objectives LEVEL identified for . Thus, percent, although compared the primary with 3.3purpose percent of forthislarger paper plans. is to examine However, • which was andequivalent Active an employer Participants to acontribution unit benefitformula. accrual In rate these of • theirthatemployers •are Could relatively long I As enough other shownsmall. that pension below, any breaks Formechanisms theexample, in value service defined more of could vested have efficientl benefit had benefits ay direct plans benefit level ($10 TOTAL per TOTAL month per year MEME NN of service)._ WOMEN WOMEN / More •"• Age vesting If.at Lump could Sum Value Percent 5range Year as Percentage of from Full AND Ultimate approximately TURNOVER ofBenefit Employee's ASSUMPTIONS 2.4% Value$600 Pay Accrued Rate to Analysis at $700 the 1.7-3.5% End million, of ANALYSIS OF ALTERNATIVE • head the specified was over Age • sevent tenure at i0level yyear for years the of full of sample funding: age vesting 30 ofpercent Final women tothe we were three were Career Age greater receiving at analy year Hire zing.the full a Dollars pen @ Here sdegree ion. vesting, we found of had on outside maternity worked the all home and tenTable paternity years -_--'4}-_-.._9-4;:_- 7 and reflects would leave 4a9-more . 4,9-for 4_9""_9 the than best up changing half toachieve .l.Jone had _ -;intensity Jyear, not worked the theof later atthat objective all. would exposure. Even continue among of The Using In order data tofrom assessthe the sources magnitude described of the potential above,gainsweunder estimated either meet Changing system twelve ERISA itself consecutive participation Break-In It isis standards. through impossible going Service months. (Annual sometimes tofewer Provisions accentuate toNo exactly For Percent benefit refers increases these the predict accrues to Increase) effects the plans, that insum during of plan younger ofwomen's complying active the benefit period women increased members today ofwith accrual thewill labor break thehave working benefits retirement interview; system 700 could ages (700 Mr. Again one-time benefit. forChairman, today. bepercent turning the traced income Under additional it tover o vesting). is the Social istime• ato analysis pleasure beSecurity, vested Long-term ignored. ofAlthough tothe participants submit earning trends 1979 Unless this sur one these as defined-contribution veystatement. well quarter data are proposals as the the of notcredit numbers Ieffects submit offsetwere each plan are of it agreement assumptions often to without employer AgWe eshorter the The proposed estimated young Availability benefits. for would 1950 about worker vesting, oneis beyear personal tomore the ]he but reduce of 1955 or prlikely the it Pension average evmore, albehavior ence difference the will61.8 if 1960 vesting Coverage data of annual bepercent that lifein important that standards ....................... are 1965 the insurance earnings exists were not value participating founded under were for of coverage 1970 the from made ERISA. decision ontwo fact. available am Bureau 1975 ong in accumulations One aI0 ppension ereason makers nsion for of1979 this to pension tthis about satisfies accr here because ua information potentially wa ls policy stoward than aone the substantial it of sometimes the over IRS seems. three increasing latter the requires vesting period suThis flast fers par the benefit tof two standards. of in participation many par years the theticipation also working new same these -,"_affects The way. OO small -_data rate career. first in e..O F O0the one or among are defined standard example, or relevance not Defined women more available required benefit plans. by one benefit ofabout Senator pre- for In full plans plans 3 our vesting for onlyfurther manyone rose young analytic to aspect firms 27.1 services percent to of offer retirement by to pen1979. syou ions on7/ before thisprogram orthey related havecharacteristics issues. become established. We join you--in wage Excessive each Age approximately or beneficiary. salary laborworkers Number mobility For$i0 (millions) between plans interferes Percent per thatthemonth were ages with Years Number fiof vethe per twent of tomore ten Service Vested Percent yyear -five enduring years and Participants of old Number sixty-four, employee-emplo in service. 1977" ,0Perc 59working asyeer nt This Dec. 31, expansion 1service 979 are permitted firms. 672,as 045Death shown analyses, Pension accumulated in to 106Table ,923 cash coverawe I. geout 571,523 With did by is benefits known the the 25 notexception to affected use 46,0be 36valued lowest theof participants the 35 earnings at in 8.8 1975-1977 smaller less than for firms period, 40under each $1,750 and ina educational Prior programs •to administer Number the 3theYear toemployees enactment pro Full vthe ide Percent anew sound through ofNumber benefits the information offsetting Employee 3.3% Percent generated basis Retirement reductions Number for by policy 2.3-4.8% shorter Income Percent in the generous Employment men, creating plans5 Years concern would about I0accumulate Years the equitable 15 Years proportionally treatment 20 Yearsof pensions 25 higher Yearsonvested 30 theYears basis of 35 Years under the assumptions itfunding divides (Annual at VESTING thethe of number Percent time this REQU IREMENTS of vesting analysis. Increase) persons changes, Lwho / separate Alternative the greater with • plan fundin ensuring 9 level adequate -- itretirement was assumed incomes.that the F.ERISA ANALYSIS standards Age OF POTENTIAL tended COSTS to raise ¢o Pay plan costs. co Pay Thetimesactual Service cost to the advantage model Age of planwomenpopulations who take some time APPENDIX by Years Annual out pooling ofofAtheir Percentage Service the work career age Increase to andhaveservice to by enhance reductions the potential rates, in overall of which benefit pension might receipt. benefits, affect The datathe retirement existsadequacy in theincomes public of Labor withdrawn Participation Statistics'theyin estimates Pension may bePlans indicative of............................. average of weekly future earnings policies 13 forunder Dec. 31, 1978to evaluse uate 615,168 shorter the vesting, 9full 6,084 range 525,4 a 87large TABLE of 13 proportion r_ 50alternatives ,398 .0 10of .6 small for plans improving may alternative vesting requirements -- the results presented here L approximation < 1 is based1 upon FOREWORD converting Percentage 2 3 of manyParticipants 4different5 ortypes More of without Year employees' vesting? participant, Acti model o ve permission. Because plan Ves but _ ted_instead /would of This theused afall Percentage option potentially an below average was of t_provided Actives $2,000.! earnings higher /in benefits. effect This onIt As their analysis should sh(thousands) ovestin wn also g(Table inbe status. the noted If)table, was that There conducted (thousands) most were if of arouplan this gby hly Tillinghast difference 2.4 with million (thousands) thisisfor women benefit attributable EBRI. in thisIt . assumptions Security in service. Actwill ofthe 1 Year 1974 provide percentage Full (ERISA), differentincrease the principal estimates. 4.1%in annual federal In addition, contributions. 2.8-6.0% legislationthe & that 14 percent had assets three growth yearstoof inof ten which the wages, years plans they had of being pensions noservice earnings analyzed or during intoother were those their equal employee tenure whoseto on to would latterprovide tend table service shows toretirement rise. the credits percentage and benefits pension ofTABLE women for accruals 2who for all had Shift during workers. Socialfrom: theSecurity one yearcovered leave _J the fof orcethese youngest attachment. bills group we simulated of women represented the current in KRISA the table breaks-in-service , those betweenprovisions the ages of - Dec. 31, impact 19radically 7distributions 7 varied 549,484 different considerably, from 1working 80,796 all 1patterns 475the ,089depending plans 2toward Change 19the ,60in 1upon 3end from a of such relevant their i0 4.34 factors Year normal 5Full group orworking asMore the that •• consideration Vesting (participants in a Pension by the currently Plan IRS. .................................. employed _rithplan sponsors) and inactive 17 • 16-1 year lump-sum Pensions instructive. plan Memorandum already retire 7between in 1979. mdistributions and entfor 30.1 have ages the We Sponsors Inhad Changing inc other twenty-two been omes. reached 28.9 are words, required Roles converted and the Within Senator 29.1 of psixty-two oint Women totoHatfield's that such an assume 27.7 would annuity, 978,000 a qualify the estimate framework, they of34.9 additional thenever a pers of young the oshow 40.2 nw several portion for orkers costs upaon45.8 would of the of key -•• will ppublic in percent. cylical do vesting ublic benefit my this becapacity use. analysis. much to vof S.19 Fariations oraccrued aformulas The smaller aadministrative greater would as speci DOL Executive Wfe ic benefits and eli pro at staff extent minto structural inate withdrawal. v indi ide vis idual Director of than two athe concerned covered, unit example their costs ERISA ch embarking aThe of nges benefit defined break sthat the participating :defined in associated Employee since othe in ncontribution aaccrual ser contribution economy career, the vice Benefit employees data rules on with ifrate ha counterparts. plan Research the vaccumulation efor with for been lifetime participation shorter a worker ten purposes matched years wwill oon rk • production noted defined participants optiononoften benefit March retirement andseems as 2non-supervisory 4plans part , benefits. 1983, attracti death ofthe aregarding di largest benefits vve ersified is that accr workers the which Accumulating umany benefits als issues would people come for before package increase toward January confuse Vested youthe may plan today: the make end 1980. Benefits costs stability of the "Inthe by These low fact, career about rates of only the " • at your percent the relationship New should least trade firm effort had half be While pension and ten to considered necessary time, service brir_ amount slightly orprovisions more who the industries. for had active more for facts in pension been may than participants light to participants also with bear 6 one-quarter entitlement. / be tof and heir impractical the weemployer forshare ofin broader each For theeach the from beneficiary. for example, workforce common apoints anage-and-service year employee's the objective being orconstruction 9described /more, vestedof were may ERISA because the administrative costs of holding small level whenwere the Employee to adoptRetirement full andIncome immediate Securityvesting, Act (ERISA) those was being with implemented less decisions. sex. As presents ourEBRI full benefit vested Because does Full statement not and values benefit take Immediate the andat positions the ages required is detailed less 45on topublic than 65 4.4% anal annual inysis $I,000, 5policy year contained contribution increments issues $1,000-$2,000, 3.0-6.5% in orit proposals. for of threea Dec. 31, assumption 1976 affecting S14Change ,068private that 45 from plan _ 64,9 ',a" pension 81 ¢Wassets ,---_ .pattern, _ E,vested a -_adequacy. one. previous but For -._ oo _developed 0 _ Death by financing characteristics. ICF.o _ r_This CO of _'_O_model private _ ¢'a r_ 25uses Some plans,the prospective mand; typical 35 inputs plan • 40 sponsors I= to an 1.0percent. million participants These results in newly arequalified shown in defined Table benefit 4. Toplans. shift Newly to five SOURCE: breaks-in-work III. D.32 RATIONALE Estimation Finall EBRI 1975Tabulati ytenure. , .29 defined-contribution FORof ons SHORTER It Costs o.14 fisthe 89.8 one inMay VESTING thing Defined .12 1979 plans toCurrent say which Contribution .09 an Pemployer are opulation 90.4 most .07 should prevalent Plans Survey. not .056in disregard the case records of representing money The purchase 2.4 importance million plans,workers, ofwhere alternative wetotal did notannual find vesting a single contributions provisions instance SOURCE: empirically CONCLUSION 4. ICF Ea60 ch Possible using estimates of higher these the Social Future skill four for terms model Security industries Alternatives isdefined TAB important data 65 LE 12matched such benefit ..................... in as understanding 47 with manufacturing plans the Current using the 19 process Population due of 8 o_ the make position the "younger on Appendix sponsors the vestingworkforce" Amay for schedule. defer a description the model This establishment includes plan. of the theThe m year ethodology. of young of new ser _ vice and plans durin oldg look suggest the can I. 33only percentage at Estimation the that be collect potential earned at of least data .21 other the ofwithimplication Participants some twenty-one oncre onsistent measures. policymakers .10 tiremen totofand income twenty-four .08 these and sustained feel InBenefits from improvements more part, .07over year periods needs600,000 old this .05 for toof nonparticipants bewomen. employment will retirees. done. .0375 depend ThisIt and thatison pension increase. after liberalization ofthat the1965. 1977 pro would 10v / isions plan Table beyear ofin 3required also these these repor indicates tproposals. sprovisions. by which a shift that we hBefore afemale vefrom used turning workers exte ten nsyear explicitly ively ages vesting twenty-five for analytic to the to tofive assumptions. forty-five words, o tested Pvested agree verwhelming articipants on the aafter range For the the year "facts" majority ten the facts most These of old highly years real meaningful pro Under of women vassumptions of the ided wage of mobile workers in $i,000 presen service, to growth 1979 accruals the worker, twho with dilem Senator patterns. regardless were would are mor mthe aetat for become used defined hat than later We of his itfi assumed the in eligible would vspeech contribution ages eparticpant's years both be when that 62% were for impossible of the earnings retirement ser off added plan benefit vage, ice bybenefits may 148 to are may andbemust 1950 is significantly disability required nottoand 1959, will insurance 27.0 to lower participant not SUBCO percent maintain be in over bgenerally NITTEE the pensions. from other ON identified the 1960 aLABOR- industries vailable annual to Furthermore, b,1969, DaNAGEMEN'r to in and level and the the pension pension RELATIONS 26.8 if second new ofpercent coverage employers policy individual step. from was analysis provide 1970 much These worker to Dec. 31, designed 1959 participating Becauseto 57,_35 provide thein scope a pension identical 3,536of but the benefits. 54, did 299 analysis not know Under was whether 6,792thelimited defined they 14.2had to benefit vested considera- plan,which yet. As participation Retirement expansion SOURCE: This employerICF paper ofIncome estimates to the standards. work the Security contributes force plan forThese Act ameans of model was standards ato that being subsequent defined that continued implemented generally contribution effort employer pension require the byplan number expansion or that evaluating with to of pension atax should a central the benefits actuarial percent However, differ of under those model, duemay ait twenty to assumption three such is postpone to possible as twenty-four. year mortality differences. the vesting that establishment and increases standard. turnoverofin new assumptions, private Asplans. shown, pension an CgDO o 33 1980 could .28 vary.1391.0 substantially .12 .09 depending89.8 .07 on the .056 answers Age inPERCENT • to The OF Years differences WOMEN goal Worked BYof AGE Between in all INturnover. 1977 retirement Ages WITH 51 NO andSOCIAL 6programs 0 SECURITY is COVERED to provide vary withOLDI_ 65 the until WOMENlevel INthe 1977of costs ANDforfeitures, YEcan ARS 102 OF be SOCIAL more ERISA's SECURI readily 74 TY vesting absorbed. 26 rules It CONCLUSION service As the stated ..................................................... quartiles entry above, whether age were normal shorter mobile estimated actuarial vesting workers in cost the ruleswith same method, may short way. improve an service 49 workers'would simulation plan34(see Table model 8). and .20Another the .09 PENMOD 2.6 milli II.08 on, actuarial or 23.4 .06 percent, cost .05 model. were already .0375 Dec. 31, 195Not 8year I. Vested On 50,$ vesting a 6plan 9 byANALYSIS plan 2.6 in 3,062 basis a OFmodel 47the 23.4 ALTERNATIVE ,507 increased defined 1.5 6,cost 551VESTING would contribution 25.2 15be .9 "modest." 1.1 plan 21.3is forfeitures were calculated using the following life have fund accumulations. Z cycle. 0 _vesting may There improve provisions is $1,000-$2,000 nThis othe t a perfect level reflects than of data plans o_o retirement the set available in pattern o,_mining income to of23% develop and adjustments benefits. -_ finance. such.-a that All In tioncosts benefits of Shorter the from contribtion potential and vesting shorter costs rate may vesting impact of of five itself a number of percent may alternative have noton ofan wages beproposals effect distributed below vesting the on for Social turnover schedules, inalternative the and same Z approximately z The •estimates 85to percent protect in Table of federal all6 show workers revenues that with the against costs less excessive of than _alternative ten and under initial these We age estimated policy and to changes these service thewould questions. distribution costs end up TABLE ofrecei 7faster ving of a plan cash vesting participants, distribution. in defined If plan qualifi private already 34 1977 edsector earned plansNone during may credits .28 be 1980 1contributing because to and .13 3 1981 of 4 toamore had service 6.ii3.6 7totothe times break, 9.09 elderly's asitmany 10 is .07another retirement participants to.056 income sayasthat in tk_. 31, tended 1957 to43,6increase 15EARNINGS 45 incomeDURING 2costs ,659 to YEAR because individuals 40,956IN$2,250 WHICH of TH lower during E 6,0Y 74 WY_LE forfeitures. $1,125 SPECIFIF retirement. 17.4 ED AGES $ 563 Changes Survey where D. the RATIONALE dataconsecutive utilized CREDITS FORinyears ESHORTER the ARNEearlier with D BET___N VESTING no analysis earnings 1937 ........................ andof in1977 women's the record working exceeded patterns. the prior 9 pension W(IMENANDTHE the waiting Private intermediate accrual period DISTRIBUTION U.S. is and pension PENSION also why afterturnover some return OF possible, SYSTEM plans VESTED individuals toassumptions are PARTICIPA the but employer. are a more TNS major moreand SEPARATING or For difficult source less a a6worker percent successful WITH ofto who LESS income has assess, than not for raises participation a set ofinquestions plans. Even aboutwith the very potential short effectiveness vesting schedules of these the benefits and ha opportunities M c thirty-four o Vested v uld approximately e35lost be expected the This ser experienced vriches ic concern e REQUIREMENTS for .19 cr actually tote twice dits known 1.1 vest about earning theunder in.09 source as largest the their accumulate 10.3 the large availability FOR aof 1979 current retirement labor .08 informa PRIVATE as empl 0.6 force break the othis tyer's ion and .06 PENSIONS participation showing interpretation apparently in benefit same plan 10.4 ser.05 vby ice combined shift 1989. and rules. 0.5 rates modest ofin may Social But 0pension .0375 increase Our athe also vested model 10.1 ones data of percent under proposals, purposes. discuss vest an these if additional reason however, he No polic was asubsequent bletalking changes policy I0 we percent provide annual about would options. for some coverage end files each general up Andare receiving subsequent before and yet background 81available the percent ayear cash Commission on of distribution. if topensions service. he thewas began public talking that their nor If help about th does ese will benefits higher, preferred _ would link During The72 were highest benefits because number occur percent not the three (see indexed, under of to of $2,000-$3,000 orlast its final more.2 Table participants assumptions: portabili aan ten salary /12). money assumption years, tSecond, in y purchase characteris most whothat (i) because instances, policy would had that tdefined ics. no most receive makers practical plan the workers Forbenefit contribution 9%the contributions benefits have effect long- gaining is E t •not erm placed onupon tied the stable plan > < ""1979. community. SOURCE: many addition, of as the Over 60 TheICF percent individual's The the future vesting same estimates Congress of potential three regular, provisions could periods, combined for ofimprove nonagricultural the a model pension TABLE pension were this vested ii defined participation generally situation system workers benefits , benefit then bywho more clarifyi hinges increa will or plan cs assets ommon retire ed n ong E by its the with85.7, in current among could the ii _Z _ ) pevesting nsions, _ easchedules. c (D h employee unjustified 0 0 potentially 0use _ of TABLE repr 0 ethe sents4tax a0 deductions lifetime 0 0 financial allowed ",_ _ liability. for "'. Dec. @ 31,itqualified credits 1result 956does E] U'_Ln inmust Security 3not plans 7,190 higher be granted fully has Finally, pension wage U_ regularly 2,3base 08on address participation aand the nondiscriminatory grown '.D 34,average 882 administrative tradeoffs at an rates annual • annual 4,944 during basis earnings among • rate this toof expenses 1all 6.5 of related I0 decade. $13,560. employees percent b Also, associated policy or0age better because 25 or years thus benefit IV. manner ofonGroup service the Pensions asformulas, LiSocial resulting fe separating Insurance are similar Security other costs. as to awith Death Social tax actuarial For aBenefit increases. vested Security example,assumptions, benefit in if that Itone meaningful is could assumes possible and expect benefits that plan that 35 in .27participation .13 _ .II and vesting .08 are .06 important .048 only as contribution V.vesting Benefit policies and plans Contribution using are also a Formulas simple sensitivedefinedto contribution workforce agecostand _ • age that and shorter service vestingof mayworkers: have an adverse plans covering effect o on additional participating improve retirees. THAN interest the 10 vested YHWAERS inIn level arate. plan combination OF workers but of SERVICE See had retirement Appendix not UNDHR whowith yet3terminate.l vested. YEAR ASocial benefits. for FUL/ LSlightly methodology. VESTING Security Plans Tomore BY evaluate BENEFIT than and may I.i ,Xpersonal ::LEVE also the L Employee APPENDIX The definedhired three I --benefit PreRetirement at sets age 35:plan. of Death turnover A Benefits shift assumptions ...................... from ten used year to in --one these year /,% increasing 362. For theemphasis aggregate .19 benefits on.09 of that plans shorterwould the .08 total vesting result .06 cost would requirements from .04 be shorter significant. .03 asvesting. one Dec. 3l, comparison 1955 separation31,but 943 prior there were$3,000-$4,000 is made to 2,005a retirement good at one. 29,93 the 8 This endfrom data of 1,769(1} defined the set includes year;benefit 6.3 3% (2) survey that plans datathere from was single that was emor ployer modified more plans participants to than reflectamong shorter using multiemployer vesting. a 6% interest plans. rate In 1969, and to options. accumulateHowevera benefit theForother thevalued record reportsof atits in less hearing this than series of $2,000. will provide These the cW higher _ r_Also _assumes costs pensionof a plan shorter plans. rate of vesting return_ of may _ _either lead ,-4O percent to: and an provisions then be administered such with as shorter participation through vestingone may account, and represent vesting thus aavoiding rules, very large to the those these acertain model. shift 363. establish cashinstances to PAfter distributions ERCThis five EeNT d in ERISA OF .26 those year 1979. WOM model Ebreaks Nare vesting WI Newly .12 Trolled Hestimates SOCIAL inqualified service from into .iiSECURI IRAs ten should defined the TYthen year .08 COVbe E costs some contribution Rvesting Ecredited D Esmall .06 ARNINGS ofbut as would plans DURING though amarginal .048 reduce defined ina 1982 securit 61 service. - 65y Zthan the 35.5% 55Inthey statistics this '-4 tnaffect II.8% I_analysis, ¢_ r_suggest. "-4eworkers' 911.2 r_ _03,375 the Most"_younger 14.7% opportunities defined-contribution _] _ _ workforce _26.8% 2,250 to reflects plans accumulate 1,688are not the years of service within the stated tenure time frame. One reason is that SOURCE: vested savings, a Coverage The break 3.survey younger pension employers' inIfdata serdata no vicefor workforces other plans gathered means 1940-1970, motivations plan complete are inCredits early from changes designed typically forfeiture U.S. 1979 to Earned establish Bureau provides occur, to of experience of accrued provide information the shorter a Census, plan benefits retirement higher vesting on that, work unless June 30, incur others set 1955 impact E.Age the higher ANALYSIS in incontext of 30,0 acquiring 46 accelerated costs for OFaour POTENTIAL pension. due Percent 1,87later 7(2) tovesting, Without remarks. the 28,BENEFITS 169{potentially 2} Covered we used ....................... 3,2E 90( arnings 2] lower a benefit at 13.2rates Age of simulation ,....4return ,_ i0 N similar wh isocentral will proposals vestto under IK3RI's As in an actually charter a age result, twenty-one and enhancing goesconsideration participation beyond the pension the deliberations protections standard of shorter willon ofuany likely _women. bills vesting vestnow analyses cash that all approach IRS estimated vesting 37 cohorts ha distributions can vThe eare The Security be anyproduces assumed resulting accrued shown. shown antidiscrimination funding using.18 and are with Between into aggregate pension to aan rolled Tables implemen anbenefit even improve .09 eratic 1970 into inco A-l, provisions treduction greater and mthe eIRAs or.08 streams 1979 simulation the A-2, ongoing short then difference, their inin level and tenure on some federal .06 the sta participation the A-3. tistical U.S. small in and basis model. revenues atax .04 but jalmost odistribution of bprogram code marginal would actual rate would This and three be they increased .03 program the also quite model times of simulations participation. Nonparticipants serious and The entitlement indicated difficult latter was of an 2.2 would that deliberations theeight approximately three receive 19.9standards percent aonvery the 141.0 small policy requires percent ratecash opwould 16.4 this tofions payment return special ha they vethat 1.2 realized didprovison is on agree normally plan 24.2 on the 59.0, to accrual restrictions employee, Therefore theand lifetime patterns. 36.8 on sound benefit in the percent. the investment business otFinally, $4,000-$5,000 her Tax accrual hand, Act Some judgment experience we ofthe analysts 1976 assumed rates primary may limiting of have dictat a ofthe 7concern e$5, percent suggested retirement the restrictions $i0, use isdiscount likely ofthat and these portfolios. 2% the to onrate $20data be job stabilization for an per development for adequate Under purposes research monththe of level next approximately fi ofvematurity. Unionization years then, 87Among of can percent the defined be workforce expected ofbenefit single to alters receive plans, employer thewhich aprocess pension cover plan through based twoparticipants out simply which of three the by estimates a older of more potential thewith comprehensive Proposals decline an are TENURE one nual_based or in inefficiency salary ,_lAN_? fraction more birthrates for ¢'_WORK _upon years rate O_examination PA oshortening of TIOS increase O0o a toward f t'-model ser the _of ovOF ice CO the managing accrued of W(IV[EN of defined who seven end private _retirement work AGED J: o£percent. _benefit the ..at several 39 benefit E:0pension 1950s least TO 0 44 , income for DURING 1,000 aplan different smaller these plan hours 1979 with receipt proportion per vesting shorter asmall (Table I). One issue ThisPOTENTIAL pattern benefits in the policy ofINCREASE for expanded debate retirement. plan INover ANN availability UALspousal Rather CONTRIBdeath has UTIONS than brought benefits viewed withisas itwhat an the 66 can calculate < -turnover only 70 be earned the 42.9 rate alternatives SEL required with ECT inED 11.3 consistent the PERIODS annual fourth could 8.2 OFand Tcontribution RI year sustained raise ER 11.2 NORMA of annual Lperiods service WORKING 26.6 to contributions of LIV abyemployment Epension S 20 percent plan. andin June 30, 1954 quartile 37 26,464 of workers .25 !,585 .12 in the 24,879 sample .10 with 4,204 .08 the youngest .06 20.3 average .048 age contribution 1977 plan 21under the24 assumption27 that 30shorter vesting that performs income arise These Historical 45based three from turnover analyses in maintaining functions: effect, upon Statistics and, assumed work provides oftherefore, more and the thatUnited liquid wage a6% the generous States may defined investments. related tend 7% (Washington, severance benefit benefit to experience D.C., allowance 5% plans formulas. had million, model. or For10.3each percent, vesting had already alternative, vested in the theirmodel currentestimated employer's the plan. Age inAPPENDIX higher 38 AgeIIfor in-- Analysis defined .18 policies None ofl-S contribution Alternative .09Years Percentage in isolation .08 S-10 Vesting ofplans Years Participants .05 .................. from than Morerelated "for than .04 defined policies --.03benefit such the pension accounts. Census be large benefits. Bureau's assets; if this March Examples were and 1978additional (3) and of May that1979 this expense. worker Current trend earnings Population include increased Surveys the minimum thatat per year Over $5,000 of service. Also assumes 1% immediate Finally, this analysis showed that the 7 percent June $10 30,and 19Except PENMOD 53were unit × itsinbenefit II as 22,plans 069 relationship differs required with accrual 1,394 from vesti to pprevent some rate. to 20,9675provisions actuarial retirement Approximately discrimination, 3,657 compared models income 2194 .5 inwith there percent that adequacy. 51were itpercent ofuses no periods have recently received considerable public attention. enhancement (for example, group Table oflife retirement I0from service UNDER insurance showsten that ALTERNATIVE income workers. percent can in pro 1979 security vide. there to VESTING Inwould TPF&C eight were thisresult provided slightly REQUIREMENTS percent), event, from amore use such shorter fthe than ulaillustration combination cost I.Ivesting million of had 71 themselves service 1.4 - 3875_ million has , annuit been 38.5 oparticipants, 7_ objective yrendered .25 Iprograms; 14.8 to .12and at the inwithdrawal their employer. 9.3 itself, - .10defined or 15.1 .._ shorter .08 retirement, benefito22.3 counterparts .06 vesting vested participants should .048 qualified be affects (average In recent employer 65 age toyears, short of contributions, 35 service IRS years) efforts workers and 4,500 rather to thewho ensure older than terminate. 3,375 non-discrimination the workforce distribution 2,813 representsof 1937 behavior i.19during 77Approach many 1978 and defined ......................................... tenure benefit with the current plans bemployer. y 10 approximately Years The historical 2.4 to 10 The relatively the Availa person1975), bility low returns higher levels p.of348.; Pension to of thecosts for earnings emplo Coverage 1975 yerunder from result before U.S. in the shorter Bureau quarters duration ofof the vesting. ofSocial Census, the break Security in Plans service facts. unit Nevertheless, benefit 50 some formulas. portion Aof review 14 the elderly of 15 a have largerelatively number 8 low of THE increase purposes. participation, under small. before developed. Beca PROCESS use current the Todata, in understand Senate. some OF ERISA ACQUIRING yet vesting theplans asis standards The number ithe and tproblem incentives Anot may pension PENSION other of available anyway. simultaneously that workers provisions status wefor In for are of oanalysis ther who concerned currently in new KRISA words are possess of ,explicitly likely about plan retired t somewhere he issues is allworkers to formation that prohibit between of before separate policy mthe andyou one- why isor June 30, Reducing enhancement 19 from _ 52plans. 39 45.0This Pension 18 to ,289of 63.8 concern retirement anParticipation .18 percent. annual about 1,271 income 0.09 rate availability In Accumulating Ages 1979 17,0security of 18 to this .07 seven 21and age Vested would 0 percent. 2interpretation ,class 347 .05result Benefits included from 16 .04 .0 0 of the such data majority a (1;combination .03 is 0 central of additional of vesting because level andcalculating hiring ofservice benefi spent, standards accruals practices the tsyears notto present under "re-saved" maintain that of canthe ERISA, be could value credited S.888 preretiremen for inhibit ofchanges provision retirment. benefits differently new t earnings job in at asOur various growth IRS compared for studies sRevenue participation tandards. ifages. to aindicate pension current Procedures, Thisand that were law. will vesting ove Our more r year. defined the compensation their incontribution participation multiemployer According vesting contribution participation. package status to rate rate ERISA's plan develops. induring plans._ 1979. the waslegislative /positive the 8See /lower As1970s In employee However, Appendix all aspects history, indicates for likelihood, bargaining earnings of part Athese that unexpectedly forthe of standards the agents, afurther below private this description high unions were maturing difference the pension rates selected negotiate Social of of of private of the work pension forceparticipants, will be under38 age percent tn4enty-fi of vthe e tax and qualified excluded from planspension in Specifically, regulations options relating for specifically September improving 29,to1983 retirement vesting for income ongoingreceipt plans separated five broader 76 participation. select This - 80 year (Table exposure has and vested vesting created 41.9 VII) ultimate Among to maypensions. workers ofsubstitute older would an 12.6 what turnover interest women, According annuity would increase 12.1 administrative especially in assumptions have values to13.3 quantitative Census from those accumulated would data 2.4 now 20.2 costs to be68.3 retired, percent produced analyses calculate percent for a the retirement vested to atof prevalence of 2 2.6 plan times the :E:benefits. 39 This evaluated .25 assumption 0 .12 in relation reflects .i@ 0 to the .07 its manner ability .050 intowhich ¢affect _.04 0 money the the quartile of plans with the oldest average age (average age have Age 31 to in encouraged 35 Percent4.4 of Women 46.19 percent. even Whoshorter Worked However, 47.59 in E vesting ach for 53.39 Year plans Betweeen periods50.69 characterized Agesthan e_ ERISAby retirement Because 2. Results the covering income. costs .......................................... shorter ofForadministering example, service Bureau work pensiongroups ofbenefits thewould Census doalso notdata ii June 30, with 195representative 1 a Statistical 1vested 5,8 55 99 benefit plans, Abstract 1,125 Under the and of14,6the aBanker's 71the Unit United 29present Benefit States 2,5 Trust 17{3}Formula 26 values 1981 sample 20(Washington, .of: 7 ofof individual II plans, and higher Only40about cost 1.2 •characteristics--shorter million First, .18 portability workers given Total .09 twenty-one an may.07 agenotto service, andlead twenty-four .05service toyounger .04 100% the years distribution most old workers, were .03 effective working of have been matched to Social Security administrative records. 13/ The Social SOURCE: and 3. The theEBRI change thepreliminary Tabulations methodology. would lead of the to recommendations very May 1little 979 Current additional Population of benefit the Survey. delivery. President's Security OHO wage base. Consequently, for the analysis @ here, we will percent. maybe have exploredbeen inattrib the utable Study ofto Retirement the generally Program more Coverage liberal benefit or costs. i/costs generally Major below For and younger studies benefits to $3_000. the women ofenforcement associated who the Under are incidence increasingly a ofwith benefit individual of these working increases formula alternative benefit outside intwice the rights. thehome vesting Social asthe salary. However, This there benefit, areas Tenure you potentially with know,Current will notEmployer significant be influenced directly practicalby last of 811977 polic or 40 year over y had changes. 211.3 - 51.2 30million .25There31 11.4 participants. is-.12 40 not yet 14.541.10 evidence -The 50 12.7 newly to .07 50suggest -qualified 60 9.4.05 thatplans such hav rollovers .04 e June 30, are workers 1950ofgenerally 47in13years). ,the 899given twenty-one likelihood income a The lump-sum ........ to unless omid-range twenty-four ofdistribution. benefit less group age expensive oreceipt group Inincludes many Approximate who atinstances had administrative retirement. oall been with the plans Increase employer their in and the requires Social 36 purchase to 40 Security among plans tend data younger, some might 48.3 allow to types be adjust one short to more of 53.0 trace to plans. service shorter vulnerable the earnings 53.5IRS vesting. workers patterns Revenue because 52.8Profit with ofProcedures workers of sharing higher theover 21-25 These Other credit. equals Potential 61-65 potential theFor duration example, Policy choice. 19.9 effects ofin Options the1977, pre-break 18.2 raise $I,000 ser of important vice. cov 14.4 ered If earnings aquestions worker 47.5could returnsabout result to anin thefour varythe with Wyatt theTopsize50 of survey the indicated benefit, relatively that the typical low benefits defined higher benefits being indicate turnover--we deliberated However, ED.C., The mpl 6for 0othat, proposals yers' 1982), this plan because without compensation in examined group p.to participants 1978, 326. reduce the most ofbenefit Beneficiary approximately the separated costs the defined pI_RISA otential of include 54and thdata participation econtribution vested facts. wages a14 for cost 44select percent 1940-1960, participants. and Weincreases are expenses stanplans dard convinced and offrom the 16 for ofunder ultimate have U.S. age employee that elderly some discrimination younger quarter baby offered 41boom women and before today. Second, women, one-half can against theThese .18 the Arthur expect firm milli largest women data Young o was t n,o.09 fare could well ten in oand rC}the year quite 2established. provide Compa todesign .07 age 4differently, npercent y,a cohort and under more .05 administration _J oof comprehensive fcontract the women it is twenty-one .04in important to the tof he and population. pension Departmen 0toaccurate .03 _to J lookt at of return to of purposes. EBRI's policyaccrue The One charter changes, •While ultimate of toFinally, the the ERISA andsingle individual eqgoes goal udoes al beyond the of be mos not nefit plans t model -- srequire frus the but is attonrating deliberations so to the calculates that do produce end elemen the workers ofadverse benefits atsfon uunder the of llany the effects care annual that bills age epension r twenty=five o£ help now offorty cost market policy beforeofbethe forthcoming simulations Commission likely assumed beThe 90 assured also apercent results from on contribution indicate through Pension would of theour that areceive Employee simulations dePolicy ffemale rate inedless benefit of labor than Benefit are (PCPP) 5 percent force shown pla a $2,000 n.participation that in Research Most Table on lump defined earnings support sum 14.distribution Institute is Two contrib things below shorter utionare as thea swage operation ERISA ystemand and has As employee at stagnated. pension athe resultend benefit expansion of ofAccording 1982 thetrade-offs. informational will weretoimprove less previous than They this gliches five generally research situation years in the by advocate old even the pension andEmployee further. 73 liberal area percent Benefit onpension policy were because: participation (I) newlyrequirements hired workers"ha ofvehigh multiemployer job turnover • rates; plans (2) prior young to generous Work participation proposals. barriers Patterns age as at this, to hire on This the the or approximately basis years 5-8 analysis implementation Years ofof ERISA's service. considers 10-14 77standards. percent of Years portability the 15of degree orseparated Moretoyears arrangements whichvested shorteron civilian of full-time Security workers employment meeting payroll participation outside tax the are:home standards George for extended were Perry, participating periods "Changing was relatively in aLabor plan .,_ 41 _funding .25 4.J _-.12 arrangements _ _ .10 1,-...,can.07be I., developed. .05 .I._ _.._ '_Also, .04 O the ,:7, 41F. middle to ANALYSIS 45 quartiles Change .,_OF 55.0 POTENTIAL and_ has >COSTS 61.0 anAnnual average .......................... .u 63.3age > ofin61.0 41. Aggregate _ Although 16the sometimes plans would require proportionately tend turnover to new adjust plans patterns, C. larger Final in seeking a Average different thenumber tax costs Salary qualification ofway. could workers $50_000increase affected. to by adoptas 26-30 role ERISA.of 66-70 Bureau collective of 2the 7.7 Census, bargaining 16Historical .8 in Statistics determining 11.8 of 43.7 the theUnited appropriate States would for benefit hadan be employer incomes 65 proportionately planwith below with a pension the ii or official in morewhich moreexpensive I02they participants poverty were not 74 for line._ yetthe participating in/ sponsor 1980 Although 23 hadand to the an June30,these I9vesting 49 42assumptions. 12_ periods. 8&S .18 For 711 this .09 SOURCE: 12,15 case, 4 .07 the Table.05 896 cost3. increase .03 8.0 for.0225 the vesting 4. Employers prior might to tenchoose $years 5/month to of meet / service, this $10/cost monththese through / $20estimates /amonth reduction / may of tend Security 1/ Totals record may not the data turnover sum pro plan exactly vides table, by co because subtracting vered it earnings estimates of rounding the and quarters error. the valuenumber ofof coverage forfeitures of persons workers (EBRI). Social would Results Security have of accumulated wage the base coverage anda i0 benefit study percentwill valued above provide atit. less a useful than situation is significantly different than for their mother's generation. The vesting an Despite equitable may the lead basis. absence to higher Differences of comprehensive retirement in income planregulatory design benefits.may standards, make it occur The regularly, Markets PENMODhowe andII ver.model Inflation", Our own estimated experiencewith Brookin_s the increase thePapers EBRI pla in non annual is that Economic most plan aff employer 31ected <42 - 35 _ more From for than a12.1% I0year higher .25 Year twice or more. asinvestment NA many .12Ofpeople, these Percentage .10NA about both liquidity men one-half .07and NA required women million .05Annual in each were ._to of men .04 implement r_the andlast willdifference arrange If •reducing formuch in Pension conversion average the as participation 6.7 plans ofage the to assumed distribution 12.1 are standards designed percent. for into the or adjusting primarily an As older annuity shownand the program, below, to younger provide but theage mix even the quarters 46 to periods of shorter 50of pension of credit specified vesting being 63.1 plan tenures. than earned. provisions. required 61.9 Comparing by65.1 In tenures ERISA addition, with in 63.2 order previous they towork obtain raise June 31-35 30,hold, 1948 These creating 71=7 !1,7 5 42analyses an28.0 incentive 48were 4 21.3 conducted 11,258( for 4) TABLES plans I0.9 for 1,to 888 make prototypes lump 20 39.9 .1 sum of benefit defined model retirement, twenty-four employer accrual proportion defined (Washington, prior health, rate year benefit to declines owhich lds the life, D.C., might break plan disability wasif 1975), get equalling shifting equivalent in-kind slightly p.benefits 357; pre-break from higher benefits forto and 1970, 10 service benefits avarious tounit from are5 then under other Social year benefit considered, after the benefits Security vesting a lower minimum accrual and theof plans. twe women's without to n43 ty-five overstate Yet lifetime the it tofacts, is twenty-one, w.18 clear o the rk policy patterns actual that deliberations .08 in elderly theor and impact y, how .07 men will they on will are affect aare much be .05 typical misleading changing. more a significant likely .03 plan.withtoAs the segment receive .0225 apotential result, ofa the supplement The Labor, baby other collec picture boomers' the death ted income estimated inof program mothers benefits each pension security data would age-and-service in recipien year infrom provided the have of which ats' third been sample by case income twenty-five year Social of step neither cell levels of roughly Security, fromthe that aggregate to than 400 year thirty- are any private individual of four estimate of costs expected the pension some nor clearly savings, of to losses. years. apparent included process In Then is defined It from as result dealing is participants we •the conceivable can oftable. Do contribution wfaster trace iththethe under how First, vesting that added ins workers uatwo fficient the plan plans, (See workers costs largest with itAppendix does informa the alternative with ofaccruals require value shorter talmost II). ion on of that of career identical which retirement vesting vested years patterns to analyze of work benefits income service orcareers fare other stabilizing. deliberations Congress. policy. plans do no In Fim The tMay have Table often size problem 1979, automa is II areemployer on also that colored tic page we closely pro38 are pension vbisions yindicates concerned misstated related programs to convert women toabout or pension misleading covered are the is now that accumulated plan 88.2 workaing policy information. availability. percent is assets enou of frequently ghprivate For to toan Research less Receiving thanInstitute ten a Pension years(EBRI) old. Benefitmore Amongreasonabl the universe e explanations o£ tax qualified o£ stable defined pension $3,000- basis workers Workedfor Acti ToEvery also vity, estimate a change Year subsequent 1970:3, jobs thefrequently 90.3% '", pp. Stud increased qomen's y411-448; Pension and of many 82.8% Retirement cost Equity" Robert have of little Gordon, vesting, Income 74.3% interest "Inflation Adequacy, in wepension firstin in thedifficult 1979. number The The demographic aging of tovested of establish thecharacteristics workers baby boom increased mutually aloneofcould the rapidly workforce account acceptable for prior areanother nowportability to shifting I0 ERISA. percent into Aug. 31, 1rare. 946 For 9,370example, work of and -- womenwage aged 9,370 related sixty-one (4) or retirement 1,584over in 1977 20.3income fewer than benefits. half had 36 contributions workforces 43 - 40 I0.1greater is .25 causedonly NA portability by .ii12shorter years, .I0NA may vesting the .07 adversely NAincrease by .05 first affectin calculating .04 the costsrates is SOURCE: 51 to 55 Full EBRIVestin@ tabulations additional 79.4 To: of Social costs 71.8 Change Security of shorter 68.9 administrative Contributions vesting 65.9 data matched can vary to 36-40 distrib advance benefit utions. 2. 7i. 6-80 •determination ERISA and Defined current defined 29. InBenefit 6 vesting addition, letters. contribution 18.9 Planspractices the ............................ For : 13.7 additional plans example, the with more 37.8 administrative new ii restrictive plans or more are17 important rate ofBulletin approximately questions separate (March 1981), about in$i0any p.per the 73; year. month for business 1975-80 per year from purpose Social of service. of Security pensionThis would would issue bebecome federal 2.approximately of Results particpants adequacy revenues would ifis6.7 the be still age percent. affected. of aparticipation majorThis concern compares were reduced to with many to an policy Empl Value some oyee 44 ofhired caution BVested at age .18 Benefits should 40: be .08 service used .07 in interpreting service .05 service .03 the overall.0225impact also forthcoming This paper from presents EBRI. a quantitative analysis of the benefits credited accumulated for each required byopolicies f young, the years annual discourage short 1937contributions through service19 new 77. workers plan Each assuming person's formation under noageturnover shorter inand1977the Dec. 31, Missed 1944 1 Year 7,786 -- 6.1 7,786(4) 9.0 5,839 300.15.3 0 workers extent As shown The who to which lea in Institute veTable women and recei take i, hopes veon growth cash stable, that distributions inenduring the the results number work do not patterns of ofroll this vested them the analysis current into partici- system of arrangements- 1980 among - Employee different Benefit employers. Research Institute In addition, the calculated H_ Recession the of andreturn required Recovery", or annual the adequacy Brookings plan contribution of Papers plan assets on _ under Economic Oin some one four _the 600,000 /41 the44 -years, plan Aggregate 4annual 5were itself aswomen. would contribution 8.seldom contributions 7To.25be the Between affected pays extent 17 .ii pension .8 86 under %by orto that reducin 87 benefits .09 one percent defined NA policy gvesting thin e.06 ofpension the benefit NA both makers traditional schedule. sexes .04 participation plans seek weresense. working to Then, in .032 improve standard 1975 There more the break-in-service approximately substantially provisions twice aswill highnot under for result the theinyo model significantly unger (in plan workforce. $ billi used greater ons)inpension this sometimes patterns 56 to 62. 0 March gives "Defined required 1978 an indication and 93.7 Contribution to Mayadopt 1979 of the Current 874.8 /extent 40 PlansPopulation vesting. to ....................... 79.which 7 Surveys. breaks Under 75.1in4service /40 vesting may be 21 41 orcosts ov plans. vest. participants, er would 81Bulletin oIn Tor Age order over the the tend atas (March to 33.0 extent current tomake well have 1983), our that as 15.9 vesting simulation ap.shorter relatively for 105. a schedule, somewhat separate 13.9 vesting larger Age morecoupled at the group realistic 37. impact Hire 2 greater of with on we defined treated small these the any estimated perquisites. one approximation year, increase pre-plus Whileis post-break of most based 2.4 compensation percent upon service converting de for will vices ,'_intermediate be _)provide considered r_ _many _._ 0 immediate different under age, the income service plan. types or This of Sept. 1, workforce. Table participati pension 1that plans 942makers. on ill-advised defined during I othan nAm Summary 1,9o 4ng In 7their In 1978 standards. May ocontribution lder addition, or oretirement with female £ 1979 ineffectual Qualifications women, --approxim there counterparts, Thisth even were oplans. se a represents 1,but tely benefits 94now 7{4though ll.1 )expensive and600,000 retired, million Terminations and abmany othat 1,2 ut associated benefici policies 88the workers 0.7 they low prevalence percent a1939-1982 ries. receive 1income will 9S between .0 with be of The of larger the all retirees d the full-time ata 14ultimate pensi them? ages benefits, from on oftmay heIf and under twenty 45 other the to flawed sources two thirtyplans. sur years .17 ofvey economic earlier data •-.08 onsecurity. whichwe and their .07 now The labormprocess ust .04 force depend, participation for.03 acquiring h_ile _thea rate .0225 DOL pension was being security and beyond vesting annuity curren Duringcosts deliberated toage 1979 at policies occurs Encouraging may twenty=two re average t ofiremen inbe or without alternative the tal private .the larger tare last erna The creation the to tfive ive more sector be benefit than counted options. to shorter typical of coverage ten additional of inyears for the cash-out Toequivalent vesting vesting was facts. aofcert pension lowest, the provisions apurposes, in career Werequirements exten are plans 26.1 defined convinced regardless t percent, in regardless would a great theseresult benefit that deal plans based inofof firms the more in aare and participation example, contribution sector, contributions unionized Senator One plans rates thing or Mark to nonagricultural at mortality during that aO. the retirement we Hatifeld end the often of 1970s calculated 1982, stock overlook wage in are hisand 39 portfolio the remarks perent when salary in rapid considering the had introducing could employees. growth first beenendqualified inthe step. upemployment S.918 0nly with effectiveness 60.0 onin extremely March the as percent last the 24, of plans; increase Mis alternative sed 2(3) in Years the part-time 2. pension vesting Alternative empl participation 1920 1schedules o.yment 8 N vestin@ Street, is motivated rate will 4.over N.W. 4 proposals bebythe afactors useful remainder should 0other .0contribution ofthan be thispension examined decade.to potential requirements for greater liquidity in plan assets to pants an at alignment least were Activity, farten estimated outstripped that yearsshould 1971:1, of Social to result thebe pp. Security growth inapproximately significant 105-166; earnin in active gs credits increases John $20.7 participation. A. during in Brittain, billion. pension the prior This fort "The If y 46 model vesting - 50 was schedule. run 7.5plans. again Then, under 18.0 awe different NA calculated NA vesting the required schedule and annuala Dec. 31,all 193945participants 659 Deathanalysis. _l.24must O -- be .ii aJ These at tm659 least (4.09 Oestimates }25 40 _J percent .06 549 I_are t.J35 quite vested .04 -- • sensitive after .032 40 O fourto plans than on large retirement plans. incomes for individuals with relatively other benefit 3.effects plans Administrative potential with change 4J tencost the or Costsfunction fewer impact ............................. 4.Jparticipants. ofof shorter pension _.Jvesting. Data plans forin these For the21 and benefit turnover formulas assumptions.into aIn flat addition, dollar a accrual shift from rate 10 for yearpurposes to twenty-one. Table only 46 2work Social 45• Reducing infrequently Second, Security .17 the ERISA given Coverage .07prior participation aand .06 to benefit Benefits 3% retirement, standard .04 formula 1940-1980 4% to it .03and age is twenty-one possible a 19 mortality 2% .0225 in that ERISA had an impact on the numbers and types of can plans. Under be 5. $I,0 Group determined Although Note This 00 life that occurs from AJ insurance the the the word -- proportion because file. "potentially" at86% u 2_The times AJdefined file of salary -- should workers contains 62% contribution would u_be AJ stressesd records with provide --26% aonplan hiin vested groughly herthis 0partici- life :_context. 15,000 benefit Suite 520 Missed upon the discussion 3service. Years inofIt relation vesting, 0.6 does tonot even otheraddress though 2.7 policy broader chan alternative @es2.0 study and of notvesting benefit solely will support defined work Passage for portability benefit women of ERISA similarly plans maymarked to tend increased men.to a For major reduce their womenchange the with benefits long an in extended term at the an rates pattern scope annual ofof and reflects new Incidence required three annual major of Social factors: contribution Security the general was Payroll calculated. growth Taxes",and In American matura- this to alternative contribution age 4twenty-one. 0/40 ,,_ Vesting retirement _ It*_ ._ I under ,--I osecurity ,I.,--_ t_ ,_were benefits, twenty-one analyses participants. pension shorterbeneficiaries pensions 5and 0vesting came twe The and nty-four offer basic from may interest waspotential questi address ma intwo tched othe n assumption, United deferred that tmajor at o Social least policymakers lOStates. income. sources: Securi part thet II Ofyof sh Pension model adminis these ould the(i) consider 5.1 tproblem. estimates entitlement ration million, a 5 is record large, whether orthe46.4 on Table employment result. around often 47 average, cri 3 35research tThis Ci percent. icized outside vthen ilian result women. because .17 sLabor tthe aff Inends other home and These Force iup t.07 for vis words, harming arious differences Participation feared extended within analysts .06 the theperiods intended accumulated one inunder by .04 the generation Age was beneficiaries pension con 1950-1979 relatively tfunds act .03the experiences have are labor rare. analyzed and of25 ten .0225 force theof not For entire this men used benefit pension $I,000 with fewer annuities can to plan's The $2,000 usually than worker actual 2S and pension be workers. who would particpation spelled entersbe plans gAs in12% out these the atin standard. established, firm plans death relatively size at rather 23% an increased, straightforward early thanthen age normal 37% coverage and theretirement leaves language adoption rates afterrose in ten of a without entry IV. pants proposals informa will The age. taccrue the Again, ion rise Model thefacts Second, based exists greatest under policy relatively '.Populations _-,_policy upon taccruals :han shorter makers amount _is deliberations '_age, _brought are larger must ofsuch vesting added 0larger -_weigh t:oas benefits be pension can during a _these '_rules, full r _be onmisleading an benefits receipt the and alysis O-,_ in the early immediate the _ level for of against ''_ywith 'earlier _ethe all ars m of the workers, relevan under additional vesting these potential I=years tthepolicy plan at of post-World 1983 five of retirement their stated: yearsnonunion War and programs "In II 56 baby-boom on fact, percent counterparts _ is their Washington, their onlyhad generation 21 relative been own were percent _ _,qualified covered. merits. D.C. entered state of women 20036 of since In the maturity. Shorter u_ workers the work _1972. public force, are The vesting A sector, retirement copension vthe ered 0rapid 96.8 by may system program pension rise notin considerations; different Missed emphasis receipt 4 Years retirement issues of (4) Ilegislation accruals inclusion is i.not 2merely ofcompleted. regulating highly because mobile, -- theyprivate Your young reachedand comments 6.6 retirement part-time pension on age workers plans. athis tionrate ofBenefit all of pension 7.7 entitlement percent, plans, (vesting) contributions the isincrease also growing inin dramatically: the1980proportion would frombeof 6.3 participation second years estimated Economic The (see run, following Table rates. increased only Review 4). the For sections 61 vesting example cost _(Marchof review inschedule 1980 1971): vesting , the onewas 110-25; quarter background waschanged. then ofMartin theon equal total This alternative Feldsteln, labor allows to force the _._l/G.56These OTHER - 60 5 Year estimates POTENTIAL Full 0.9 the0J _plan are EFFECTS _ based Oand _9.2 to _upon 0Jworkforce _2.4% 26.3 aP-_model OJ characteristics oNA _defined Q; c_ :>_$0.6-0.7 Obenefit J •such AJplan as G.with 47 OTHER the POTENTIAL lowest types .23 of level EFFECTS .i0retirement of.............................. .08average income .06 service programs .04 (five may .032 years achieve22 of ,..2 service. representative ForBecause the 45 women 0 u-_ sample .Lsthe over _ -IRS age of seventy-six position _ $4,500 .defined _.J OJ -on in 1977 vesting benefit _-4 half $2,250 _.J O had Jmay - not andeffectively worked $1,125 defined O) after (1) Six alternative month benefits total ten integrated formsyear ofvesting compensation with and Social wouldto beachieve Security, affected themore potentially original than SOURC tics E:difference EBRI wouldTabulati to 55 declined increase March opresent ns 1978 of to Sless contributions o and cial value than May Security 19four of 79 Current the times administrative 21bybenefits in P12.1 opulati 1950 o22 npercent, and for data Surve then anmatched ys.gradually individual compared 9to moved in 1979 would have increased shorter the vesting pension participation policies rate couldamongalso women by have only an Table age4845.4 Older The results Women .16 andofSocial .07 this Security analysis .06 Credits suggest .04 1937-1977 that: .03 27.0225 women service $2,000between age. to than $3,000 the under ages ofdefined 15 and2%99 benefit in 1979. 9% plans. From the age Consequently, 24% in May of 1979 for it is Of the 2.2 O_ millionnecessarily covered 4_4_,,_4_4_-_c_ nonparticipants (202)improve 659-0670 "_retirement identified -,_ _ .c2 0 inincomes Table 8, 48.5 if workers had been Missed ERISA 5was Years designed as0.0 a comprehensive1.1 regulation 1.9 of the private erratic plans analysis awith nd part-time would vesting beemployment much provisions, appreciated. the likelihood and of Your theaccruing views liberalization a meaningful will directly of difference with approximately "TheIi Incidence orin the more$30twoparticipants of billion, costs. the The Social the and model baseline aSecurity calculates moderate level Payroll for turnover the cost these Tax:of (2) SeeSurvey RR one vesting 1048 1.-4 3data toTh Year eisolate proposals gathered mere Fullfact .22bythe that and Census .i0 reducing effect ourthrough analysis pension .08 of 3.3% thethis support of participation .06 their change of EBRI potential .04standards on $0.8-1.0 and the annual effects. Department .032 to age plan retirement twenty-one 61service), - 65 benefits would NAand this havein the increased objective many 0 -W quartile 8.4 instances • themore pension with r_ because 23.7 effectively the participation r_they highest 26.8% provide andrate level lump efficiently. among .,_sumofwomen ,-_average by . purpose. override thirty-five seekingout ERISA potential tothose forty-fi the plans relative vesting measures, ve inwhich 1979policy standards age who havewere and makers five working turnover should year for investing. understand May some of 1979 workers. new and that indicated plans, various They withcontribution earned overstating 4.4 Shorter aspercent a break-in-service plans vesting theunderbenefits with intermediate isyear. i00viewed and or Inmore this costs as assumptions. participants; simulation one forof lower several we only Thus, and wage came alternatives (2) up workers. some with data 5 results it is wIn ofrom rth addition substantially a long-lasting to increasing increasing employee-employer pensi benefit on administrati relationship. expenses on burdens in Workforce both fordefined such a . Table example, March51978 One if Work 60one and setExperience considers May ofadverse proposals 1979 wof Current oimpact men Older would aged Population Women chan onsixty-one 44 gnew e theplan Surv or treatment eo 40 ys. vformation. er inof1977, maternity fewer 13 Even 28 and than if half the ° administrati plan perce nation and defined participation dat49 a. nwomen tdescription. While by were informa have increasing contribution veno working of and created research any twomen ion .16 funding Thefor over age-and-service the rules some inreports acost nthe tcosts. .07 plans he concern employer and prime last ofhave regulations our with two about child .06 who products been years did cell. abearing the released contribution of not these .04 equitable andthe ha ages decreasing In vdata by eplan, this DOL anearly .03 treatment are penwhich utilizing sion not analysis, rate competitiveness doubled. must a plan vailable of.0225 of these meet pensions as five shown the for datof a • years that $3,000 for issues. retiremen These ill-advised will toVesting We $4,000 becan analyses tfarincome cite or levels better ineffectual two security do off were specific not under change purposes. but 0% conducted examples the expensive quickly defined There where for 3% policies in contribution is response informa model virtwill ually tion to 9% prototypes be plan plan is nothe being ein xt creation result. en most tordata has oforThe in the percent steadily. empl older oyer ofincluding the union pensi Inworker establishments omembers n prefer plans women. is atand coemployment. toCareful uld 89.9 with cash create percent more assessment out substantial Mo than vof ing their 1,000 nonunion of to policy three added vested employees, members or administrative chafi benefits nges v91.9 were e year onpercent covered. likely vesting and plan of3if/ •• (3) Increcouple ase in plans this contributions. becomes pension female frr_Q country compared of Junmature eyears labor 3system 0, today 19* to 49" when apart. force The (49 sAmerican eeis with v percent the RR iews participation quite 1T 01relationship he .4)an expressed worker young ofEconomic emmen." phasis but retiring rates in between it 14this / is on Review, during The and poised stat preserving the Ma annuitizing ethe yment percentage to 1979 1970s, make are Current athe his and of major workers Population the or seccontribution her urity of vesting aid our provisions. efforts to encourage the development of better percent wasassumption. below Comment, of the all ERISA private See agesector 25 Appendix pension workers participation Ain for 1965, ato standard. description 19.5 62 percent (September Byin 1990 of 1974, only the 1972) and about- service estimates. Labor (14force are years Because also participation ofdirectly some service). defined data related indicates Asbenefit shown to that thein plans women's level Tablemay work of 6,benefits already patterns the cost 66vesting 49 - 70 1 Yearunder NA Full I,_.21 _any r'_ vesting _ _ .10 3.3 _schedule _ _Z.08 _4.1% 18.0 _ _ in .06 the c_ 26.6 OJ r'_ following .04 _ _$1.1-1.3 way: •.032 "I_ particularly small _ _ plans, _ 0 changes OJ l_ _ 0to IRS • _ Revenue _- 0 Procedures -,-_ theIndividual H.beginning POLICY of 55IMPLICATIONS plans 1960 when have thebenefit .................................. prevalence 6,750 accrual of pensions rates 4,500 and that beginningvary3,375 trends widely 25 employers toward on a rlarge and .O may reached number be equality heavily 0 COof OX _0plans in ,-_ 0the affe ,--I,_I' cmid-1970s. with ted 0", fewer bby }q _It the -r,_I- than t0ookhigher Social i00 participants. Security costs about of Table benefit The 6 Women potential andWhodefined Did Not impact Work contribution of shorter plans, vesting alternativeon29 plan vesting 1.4 (1-2.) forpercent COS increasing 65 Tand among overall men the by number costs .8 percent. areof 85 Those relatively peoplewho69would receiving modest, vest under 19retirement thean age higher (4} 28 mopercent $4,000 nth50 period, to aveon $5,000 i. rage earnings 2Although benefit ,50.15 7 plans pervalues below .07 yeathe r 0%were number the.06 Social estimated of 2% .04 Security vested for.03quinquennial 6%workers wage .0225 base,will agea defined pon ossible their tcurrent benefit o determine those P_job 'they _Dand -,less _when -M ofdefined are _._the than cth /_ oauthor permitted seone ov "_ contribution er year, "and ,_twenty-one -M do [-_and to u_not13.6 donecessarily reached so percent "_ plans .,_prior _ [zthat Swith worked o_ to age, Iiless retirement. or -or Othan any more other participants' C. BACKGROUND benefit claims. In pursuit of this objective, of Health information and Human on Services employee will benefit ascertain policies. the extent that such cash SOURCE: pension turnover _/ This will I_BRI be assumptions, plan tabulations slight is in notoany f S which necessarily oevent. cial Security are Thisbased same Administration equivalent work uponpattern a to worker's data will thematched also $i0age result to unit distributions, have lessll/ than ten year vesting, the increase in twenty-one 1.4 7150 =percent Full 75 735-38; would and inNA1979. raise Wayne under Immediate .21 oIt vthe erall Vroman, would NA .10 pension pension have"Employer increased .08 4.4% plan. participation 9.6 .05 the Payroll 22.3 rate rates among .04Taxes by $1.2-1.4 1men percent by and .032 0.8do Money es have groups of generated shorter of women will vesting extensive be affected in shorter differently. public service discussion The early plans part regarding is ofapproximately this analysis the that around In theysummary, had this • been All average. _with it .,aspects _ ._their is _ or)difficult Consequently, employers of "0retirement -,_ _ for [_J toor)five predict the program or_D-_more estimates -l_ how [years. z.] design, cO the in For costs -not Owomen Tablejust ofwho 3 shorter percentvesting. of • theplan thirty-five size: tothere forty-five are fixed year oldcosts women associated with more thanwith five participants stability The paternity magnitudes rules data in could lea on ovspecific fe the depends small I_ forimpose differences purposes Q;employer plans upon additional ofgroups were acrdeterminin oss a_ obtained number the is QJ gan administrative oldest important a break offrom to yfactors, in _ oungest determinant benefit service. Q) costs. age including consulting U gr Up of ouptowhether Benefit sh 501 ows the in on had small U.S. benefits the Table atcompanies, benefit basis least 8. from of Another ten gain. generally sex. ultimately 0years private 2.6 Increasing Before ofmillion Social costing increase, pension turning the or Security 0Americans 23.4 coto plans. st the explicit percent oearnings f dovalue jobs, ingByproposals were business reducing credits reducing 0ofalready ,benefits between aimed tax as the participating werevenues, _at all m193 length for dealing 7 and the and of in Other federal Sur Table instances. representative they ve51 y Potential would conducted 7standards, Labor pWomen ublic show The force Pwith value use. olicy average b.14 ycosts worker provide theSocial participation of The Options Census pension accumulated of DOL amay .07 Security road shorter s Bureau taccumulate aff benefits map measures is .05 Covered contributions for found concerned vesting in acquiring that are 1978 Earnings a.04 vested point 15.0 tha based may could the t million in since fall .03 on sought benefit easily time acthe tmore ual women estimates after da beprogra ta 30 of five heavily were have benefits. $1,750 mof times data been theon ultimate shifts been t Oha vert allows collected $5,0 inresult 00 work analbu force will gro y_tsts Similarly u-ps, has ,,4be ._patterns to_no that e_tnot valua been fewer if t for because e0avail %plan _the people ._individual a .,],: ac of ble sponsors _tual rthe will ._orutime t1% is iliza receive no ages. _defer involved t"_ tion av "Xameaningful il _ of benefit a _For ble 8% in asset example, vesting. in aaccumula benefits; -improve- meaningful .0225 0 During t the ion , implementation for participants, to workers ERISA _the young / retirement The were established workers sponsorship average covered. ofreflect as covered ERISA. income well decisions value Overall the 5security minimum /byas vdefined iews ofwould public a of approximately of separate standards benefit the the help, sector elderly Employee along plans coverage group in for with Benefit will $i0 coming ofattention rates participation provide per defined years. are month minimal to higher the benefit perrelative butand year the expenses, accumulation participating Although While while at stabalizes pr it athe market ois viding employers general peak employees over could time who trend organize with easily relativereflected insignificant have and to the an sponsor annuity percentage a benefit shift pension SO percent accruals. of toward plans the greater they more The do b accrual rate defined benefit plan. These estimates assume • Does not27.1 19 are incland upercent depercent shifting In Wage pyears lansMarch the coveri will Behavior", in nsignificantly; of analyses g1978 1979. be selservice. l-em below and ployAs edMay presented Applied age many i19 nthe di25. vFor 7 idas u9 aly sCounger 60 urrent The example, Economics, percent (Xeog in aging hcohorts Populati Tables Act pla of of the ns).the regular of 1974, o4,n moderate women baby Sur 5 vand nonagricultural eys. pp. boom are 6, more rates alone 189-204; thelikely could used PENMOD workers John to easily • 7651 -contributions 80 NA vesting .20 couldNA .i0 provisions, vary .07 over 7.1 the .05 must20.2 rangebe .04 shown. examined .032 These in suitability twice as of administering high vshorter I-., as ._ _,O the 0 vesting. 0 cost pension _-_ in I.,,-,_longer _ 0programs. 0 service v $,., ._ These ,bOplans. 0 0 costsIn (Mgeneral, tend shorter toward above vesting also vesting and show early are the retirement likely effects to began for be plans distributed. to makewith them accrual effective However, rates retirement itofis$5 firms APPENDIX: administration in different 65Methodology costs parts and could of the Key ,-_9,000 increase country Assumptions _ 0 and because 06,750 were ............... selected of the 5,625 need so as A-Ito thirty-five years until those beneficiaries employers madeleast up a segment able oftothe retired afford them. whether time necessary the cost increases to become are vested, ultimately shorter borne vesting by: increases the twenty-one Table 52 8of Pension standar service benefits .14 dStatus would includes of likely .07 for Workers benefit 20 vestto Aged .05 under 2421 formulas year current to.04 19 olds inlaw. integrated 1979 .03 were And, approximated duewith to .0225 theSocial aging vesting. Specifically, ERISA established three standards that plans age 1,000 Permission forhours with thatper matter. ten toyear. Research quote or From fewer Among from Institute, Additional thethe participants. Sorocial women reproduce its Security between Trustees, Aggregmaterials ate record the Data members, ages of the for ofcovered in twenty-one these First this earnings analyses Year publi- and ' additional workers vested may be relatively iliberal II nhere low model Hagens Social assume vesting wasSecurity andaused turn John among oprimary ver to Hambor, all calculate rate enplans, titlement. of"Theapproximately the there Macroeconomic Howe increased vwere er, the differences 25Social cost percent Effects Security of faster per among of a an interest u :> rate of U eight P percent, c_ :> salary ._ increase not distributions and mean 52 estimates $20. that there occur are Qj.19 will and ._ derived the be .09 ause commensurate to from which _ .07 .,a_ such increase Department monies .05 inare _;the .04 of .,-_ put ultimat when Laborerecei _:_ receipt .032 report ved. of percent. showed plansFederal that This with the lump-sum work The policy O average o •patterns potential distribution influences O • service of 0older cost 0phenomenon • the as women increase • •vesting short were also un significantly 0for as results _practices afive • •change in years undercounting different of C_from :_private can i0 than be years tenure who to identifying would be have a much lostways service larger to credits improve portion underretirement the of cuthe rrent annual incomes. possible had hours SO These URbeen CE:o£ with results serICF vthat, icetheir estimates that suggest employer despite would be prior that, for the creditable to a because relatively model age twenty-two, to the defined ..I=small _1-1 indi 4-)modest vidual only firm benfit years ifworkforces increase such after plan leavetheir with in were extent estimate of women's the value changing ofwork accrued patterns benefits in only one for generati additional on. Among workers, the SOUR(I: pensions Notes to Charles:be D. Spe are To representative ncer talappropriate Associates for compensation 1930 of to100% 1975the , E13RIvehicles firms' tabulatio_ o_s and, of clients. IRSthus, data forwhether 1976Consequently, employers with a appreciate increasing 19 in plan 77comparison .this but Table , ma concern by had tsocial makes ched Sex 4t nshows o ot _or tactual we U.S. Shorter oprogram yet other the 0first that vested. empl Social Sostaff. expenditures. cial o oprovide ne-third yers vesting Security Securei Slightly less _=anofanalytical ct 0requirements oth ympetitive data more obenefits se otha than vertexplanation with teighty on hey 1.1 _=the may canno million fo0reign had record. talso no for be c or oco ._mpetiti made the 32 vSimilar 10.3 lead ered phenomenon oavailable npercent plans data in The number formprocess for of Security. policy people of acquiring by analysis. working calculating As aor apension looking result Plan becomes the for benefits work. benefit Plans complicated, An(1977) (and alternative for costs) however, a Re 22 way venue for year when to Loss look low these old. atwage than when came the 1960, in53 defined value athe fellow for from Reducing objective level of example, contribu accumulated worker twomodest. of.14 the ultimate being tonly major ion retiring participati 3.3 plans. sought bene .07 This retirement sources: fpercent its. twowas oThe nyears analysis standards greater Upon .05 May ofincome private later 1985 withdrawal (i)benefit oat C.04 security rurren of asector adjusting the large, tafreceipt. rom bottom Popul workers provided range .03 the abreak-in tion of representative plan were The aby ofSurvey market ultimate the different .0225 vested; service vesting being cost this participating accruals. same cation pattern Private-sector isIn granted fact, is in reflected a pension if the when employment participation plan --due larger at acknowledgement grew thatemployers as time standards much outprovide between of were 39.2 is higher made. 1975 reduced millionand coverage. This to working 1979 ageas study Pension it had individual elderly receiving If theindustries maturing benefits. of the and pension types system of plans. is leading These to higher differences recipiency who Caccount ongress year retire 4. assumption for for als Possible ino adecided workers the 10 percent next Future of that five with increase seven empl years Alternatives less oyers will in percent c than the orecei uldpension exclude one veper a year pension participation from year, ofparticipation based service, current upon rate their ovthose and erannual the work 53 entitled, than Payroll their Tax counterparts A.19 -,-IPrivate Rollback", _ {1).08_-,-I in Pension older .06 Social cohorts un Forecastin .04 and Security un within 9 .03 Model each Administration, age u_ (October, _cohort .024 women to 1982. vesting pension for plans. a number Under ofERISA, different minimumpopulation vesting groups standardsand under directlya considered contribution year Benefit either to newer full of accrual aand plans smallimmediate or plan rates, older thanvesting of plans plana large could inintegration plan. very be as high aggregate vehicles. _/ This Emore costs, ven assumption among than the those IIimpact was women participants used on between some to age reduce groups using sixty-one the of the workers and complexity entry seventyage and in firms normal of 1977the tendpopulation to be that younger, was comparable with shorter to the segment service of and the workf higher orce turnover, that was although small plan data analyzed here are probably of and the baby to workers distribute boom, tend the to number to make funds bewhoverstated. oortheir would purchase benefit participation annuities from age twenty-one for standards the more Table 54 9 Workers alternatives Similarly, .14 Aged 21 to .0624 theindicates in benefits 1979 .04 Not Participating that .03 for shorter 25 .02 to 29 vesting year m33.015 o will olds i/ pattern ICF 1979). in Incorporated, any specific attained Con A tribution Private year of Pension age(billions) is thusFore determinable. casting(billions) Model, sample twenty-four, was l/ conducted See of Appendix defined as seen by in the benefit ATable for professional 9, a and description a slightly defined staff smaller of contribution of the portion, ICF model Incorporated 46.7 plan plans percent, used with inhad in 1/ Retirement Income Opportunities in an Aging America: Coverage and Benefit were actuaries partly earnings predict a of function that$13,560, by 2010 of when and the the aprevalence plan baby boom with generation of a contribution vestingbegins provisions torate retire of approximately 54 Office of .18four Researchpercent .08 and per .06 Statistics, year .04 for August workers .03 1979; with .024 five Daniel numberanalysis. Some of alternative analysts Because argue turnover that manydefined plans assumptions. contribution are moreplans These well-funded offer populations a much than pension the today's control number benefits younger The of the l._total pension or working type provisions, 00-ben number ebeneficiaries fit of c_age :p,of _vesting levels, >women. new pension retirement _- however. on Because provisions population (_ _:. participants _>older ERISA eligibility _0-surveys. women used already that el/have _>by_provides would >For plan already example, provisions, ha0vsponsors. ethat 0reached resulted the yearsor may twenty-second U.S. SOURCE: turnover be interests significant. EBRI actuarial birthdays industries. tabulation ashigh u'_ I well ¢") _'as as _] were ,,.0It cost of _0 the _1Social i0 is considered. mThese _w Do {I} _1 rld also method, to ,--_aSec O _markets. cJ results upossible 12 rityFurthermore, 4J4-}4-} percent administrative _an_imply .--Ithat intermediate ,-_ .,--I for that only the data women impact many shorter 4matched 0 D_ who turnover defined may -_had vesting tobe been small representative break-in-service itself. defined For defined benefit rules. of contribution all plans We small are may convinced plans, plans, also tha tend they we t aestimated somewha tomay betnot larger more that meetheavily portion a strict typical of l/ women The agedestimated fifty-six were approximated tocharge sixty infor 1977,from calculating 93.7 the percent benefit had thenoamount cvalue overed for earnings of a a27 offer Table not taken pension i0 Workers would coverage. beAged restrictive. counted 21Three to as24 hours employer in 1979 ofIf ser characteristics -vShort ice pension for Service purposes plan affecting ofofferings determinin this g ifand a -- standardized had earnin are(October, 55 already available gs to at vested all private plan on1979), bey .14 survey rules o innd analysts. their 1937. are da sponsored t.06 aapplied cusets rThe reThe nt table but Con across employer's .04 by git ress als isthe aowell could diverse shows .03 plan. Pension known improve that work That .02 tthe haforce, tthis leaves and younger ur_erreporting situation aWel£are about common .015 elderly 2.2 byis a rules may i00 differences I. beor will Fitaht nalmore not fewer P inayresult career increase participants; Plan new =in pension patterns 30% significantly the finaplans l of proportion and 5older ea are rns greater (2) created versus for data 30 ofpension younger because years separating on service. benefits a women oflarge the is workers cost-benefit to tonumber most compare women. who of trough. twenty-two, contributions rose conducted cooperation only the Under Firs types 3bythe percentage analysis. tthe can ,the with vof ]_RISA esting Census usually defined programs: staff requires points standards Bureau be These benefit of cashed defined through and extensive EBRI, were results plan jointly outbenefit 1965. reduced and the whereas disclosure worker sponsored are with During and to the directly defined fi the isv benefit the of eby insulated years information aid late KBRI contribution. will related and 1960s and offrom the not the comments privateplans bymarket be cash Depart private to payable out the ment women. in rates _ntitlement protection thethen previous Stated For more is (Washington, example, alternativel aeleven o£ desirable theyy ,young consider ears. D.C. goal elderly, :38Most Social but The percent o£ it Employee those the Security isofnot new working recently Benefit the workers andprimary the women reaching Research were relative employer were young retirement Institute, participating rates people goal. of who age, 1981), worker Young in or more years of service. workers vesting remainder in pension Hamermesh,,, five who status ofare percent this plans. in within 1979. decade. "Newfi on For As vEstimates e Although years the earnings example, pension of normal participation ofsystem below prior theretirement matures Incidence the to inERISA, Social aage it pension is when ofbecoming plans Security program first the in Payroll employed. isthe wage are In55more addition, thislikely assumption to the .18havconditional e earnings would .07 on imply, .06 nature a regular itof.04 basis tends federal as .02 the to ytax age. understate deferral As .016 thesethe for andwould the beselect assumption more burdensome and ultimate and a for 6%turnover such interest plans. assumptions rate. Planare assets describedare statistical In 1980, March [._sampling 1978 Ccontribution O-contributory a _-number and c_-,4 ::M )AJtests. ,::: ay A:J,,1979 of plans (_)-Cshorter urrent 0J- requirements, c:l .,_ and ::>AJPopul :=:,. I,those vesting ation a_- Odefined Surveys. --c_.,_ alternatives ::: and AJ::: ,,>AJ benefit portability 0q-_ 0q-_plans were greatest only planabout contributed on one those inyear 0 four -r_:J--E_--_ employers old. approximately had worked 9-4_--r_-. -_3--r_:j--_l and after-workers -r_:J- seven the _ passage _ ._percent least _ D of able ERISA. of to average Inafford short, annual it. until affected contributing by• shorter teligibility o the program. vesting provisions: than larger the plans. more An restrictive analysis the of participant's participation benefit in arates defined declinebenefitunder plana policy varies of participation _/ Money Participants is Income gettingandevenPoverty smaller.Status By comparision, of Families newly and qualified 34 Personspension in SOURCE: Benefit 56 ICFestimates Program, can.14 expect Department for .06 a mode to l of defined receive .04Labor. benefit .03 some planbenefit. .02 with 11 or However, .015 more p. been from 2.236. / in Canumerous ICF The rtheir eer accrual Pay Incorporated, jobPlother less anof =any than 40% employee meaningful one careA eryear. Private abenefit verwork aA geslightly related earprofessionals. ns Pension folarger rbenefit 30 year Forecasting portion requires s service. of athe women Model, ESTIMATE relativeI =generosity1% toof3%plan benefits. $.29 to $ .89 $.1 to $.3 plans l/ Harry with fewer Davis than and i00 Arnoldparticipants, Strasser, "Private obtained from Pensionactuarial Plans, manufacturing that only I0 percent and of communications retired worker beneficiaries industry werewillmore have likely spouses to smoother 56 Tax, base. path Southern ofAlso benefit .17 assumes Economic accruals .07 immediate over Journal .05the career participation. (1979) .03 than; those and .02 Janice shown Seein .016 Appendix Halpern Table 12, ofbelow. plan servicecontributions beyond Other age arrangements key twenty-two assumptions and investment awill xe to used be also counted inincome have theseforaprovides analyses vesting substantial purposes, were: an indirect impact suggested Census ifthese arethenearing women potential B participation ureau's assumed by would retirement, plan's the annual have costs IRS age tocurrent March sv uhad ffered irtually for of be been Income shorter consideration. equal credit participation nothing reduced Supplement to losses vesting to can the age due be tobenefit twenty done in th For rules, toeir breaks all -one to example, Current affect of the liabilities in inthe 1979 service Population early less inestimates would April career the than have ofour with their employer for five or more years were included in the analysis. a consideration typical Changing when workers' they Break-In-Service small were earnings. aretwent firm plan y-one.age, This (ten Prfirm ovisi By ons estimate cor size, omparisi fewer oand n, was industry participants) the based cohortclassification. upon of women anfrom analysis twenty-five Further the of shift. until break retirement in clarifyin service in has gshorter most the occurred. restrictions instances. vesting, In other If in t the words, he policy Tax contribution Ac S.19 t makers of would 1976 accumulation permit limi will tin upg the to have is one use rolledof to characteristic Table million women serious ii were the workers (October, problem The Tenure con United earlier sshared iderably orin and 19.9 tStates hese 1979), anal Work by percent mmost yodata. :sis Patterns re likely employers. suggested sponsored 1978, of the oftoWomen Current ha twenty-one that ve by Aged worked it was the Population 35 tothan to a twe combination Pension 44 nthe ty-four older Survey and year elderly of employer olds Welfare Series and began actual pensions. 3.57 benefit U liberalizing work nchan participants It gi patterns ngalso consulting based .14 Doretirement llrequires ars ofusing on women Time an .06 de a sfirms. analysis of and t 6% S ailed edifferent rvice interest vesting .04 stPla atements The of nprovisions. rate ages =defined data .03 $I0 and across onpethe benefit on r mo benefit common By .02 levels small nth1970 accrual per periods of more plans ye plans li ar.015 a rates bilities than of inwere with their of Further, variations option 2of firms Filling / widely. Health Ibid., ES 1960-1969--An Tadjusted and IM virtually Information Ain and TE small p.the II 39. HItum tofirms value an =nothing may include Services Voids Overview", produce of be can asssets all 3% aswill to be benefits jobs low 4% done gather in Monthly and the astowages. valued affect pension $5 such $.89Labor orinformation to at Considering the trust as $1.18 less Review pensi high than fund. o,ns for their $3,500, as $.3 of July, thewomen $100 to fin firs $.4 the a1970. ncial ton per time. the should Dallasbe receiving L. Salisbury pensions than the old elderly. In fact during 1979, A As fora result a description of the growing of the availability methodology.of pension plans an increasing increasingly necessary and toAlicia _effective ultimately _ _ H. inacquire providing Munnell, _ a u pension _retirement ¢}"The , participation income Inflationary - _ for_ alone the elderly. is_Impact , not 0 Thisof consistent 57 trends.17 continue.07 to evolve.05 the changing .03 role .02 o£ women in .016 the NA - No presented t availablehere. of 1980, theimpact •_IRS 12. 0 proposed on_ _ costs"_ _new . of 0 shorter _shorter (M "_/ "_vesting vesting. 0 _J (D safeAlthough ..t_ ..oharbor very recently P-60,retired older No. 120, women and(November haveseparated not worked 1979).outside vested the participants. home for sufficient See samplethe ofpercentage small plansof used earningshere contributed indicates that to atherepresentative cost of 58 person, servic There e. based is.14 ndetermine ot upon comparable .06 reports whether time.04 series by several the data .03 on potential benefit pensions .02 but consulting increase there .015 is in plans haveDurin giveng participati 1979 on to more than twice as many people, both 38 men and Y obtained /Executive iFrBenefit & $5,from $10, Director Program, benefit and $20 per Department consulting month per year offirms Labor. of service. in different Also assumes parts of 14.6 percent worked less than 1,000 hours per year. 4/ Social STm TE Security: In = Perspectives 3% on Preserving$.89 the System (Washington, $.3 147 // Bureau Ibid., of pp.National 59-61. Affairs, BNA Pension Reporter, Vo. 607 (April 4, 1985) receiving a spouse benefit rather than their own entitlement. The increases in and accruals 58 thus Increases are forpreferable. these .17 inwomen. the They Social .07 argueSecurity .05 that a combined .03 Payrollpolicy .02 Tax", of converting New .016 England regardless beengroups. less of thana pension 1 •x_ million. _L 0 plan's _ _ By actual comparision, "_ (:_. 0participation • _ there "0 were _.,standard. 0 I.I 8; _millionAmong ,,_ participants .._some This Appendix particular service A for for age group purposes a description of women of was vesting ofchosen the methodology. is because credited they were fromtoward simulation results would suggest. However, the very consistent year-to-year the year yearsunionization ofyounger, childbirth hastatus d related only of46.1 the leave perent employee's with with no break workforce no covered in seralso vearnings. ice affects © occurring While the ifemployer's the the Table worki women. ng 12for Putting As tAnnual hese an a supplement employer data aside Sponsors forfowith rresearch toBenefit the reducing ampension oment purposes. Payable consideration thein NtISA at which Age pensi they 65oonfwere survivor participati not o yet benefits, n 41 participating age it p.characteristics 59 607. In These orderma that .14 ttoched clarify determined data.06are thisthe the process supply .04 richest weorknown begin .03 availability source our analysis .02ofofprogram pensions. with.015 information the will 13 the int three-fourths The and / o 4. be the survey country F an Economic o De rtrue IRA afunding Such a th im Efficient mwill mo then be for ediate rean ne of and fit detailed Review women selici ultimate the pension tat were participation. and us = young tas 50% of information effecti (March description plan well selected result othese workers f a/participants ccr as vApril, euplans. ends ed men. deli have on so o bvfup ene tery he these made as Finally, fit, hurting 1980). pre of were tova retirement data red significant lence be in uthe ced the see plans representative intended repor and bySocial be with flevel a progress tn ctsefits orrequire beneficiaries regular Security: of ofand lump toward .9of detailed vesting fosum r the their and threshold D.C. ovconstraints, erwhelming : TheFor of Employee many retirement majority 0 it -may ,workers _ Bene£it not oforworkers be one already realistic Research plan .who ,_may retired. would Institute or bewise preferred become , _hat to ",_ expect 1982 options, eligible to ) the pp.them then, other 48-49. for toadded also because can cObe provide cO benefits pursued they -_/ I-b-l-d.p. , 44. sha sufficient re of the towork assureforce theisreceipt participating of benefits. in at least one pension program other workforce is exposing them to the pension system to a much 4-}greater degree than 59 .17 .07 .05 .03 .02 .016 ll/ Social Security: Perspectives on Preserving the System, EBRI, p. 56. periods during 0 their .,_ normal working -,-_ ages, nor consistently -,_ enough toward cO cO the pensi Tableon13plan Illustra data that ted Annui indicates ties a similar maturation phenomenon. 43 Among all women, 12/60 U.S. in each Bureauof of the0the last Census, four 0 years. Historical0The Statistics basic0 question of the 0that United policy States 0makers • 0 • assume 0d jo-i_nt and survivor ._ election, payable -,._ for life of spocuse _ P-_rspectiveson Preserving the System, EBRI, pp. 289-291. 5_ 9women // See Social working Retirement Security: outside Income the Perspectives Opportunities home will on comparably Preserving in an Aging increase theAmerica System, their , EBRI EBRI, pension , Chapter p. claims. 55. 3. 60 0 0 0 0 0 0 defined benefit plans to defined contribution plans and shorter vesting will defined in defined benfit Certainly contribution plan sponsors, better plans communication once newlya worker qualified andreaches utilization during age1979. twenty-five, of joint There and weresurvivor another the workend patterns of their of childbearing women in theseyears age and ranges their whorecorded have sufficien tenuretwould tenure have to fallen make decision Tsh standard employee able ould14beto it returns Patterns clear offer has als that to aoof pension work. been many Benefi pr older program. Other otpoAccrual sedwo proposals, men thatA-2 -dA-3 oDefined the notbreak-in includin qualify Ben gefit in ser the vice their Economic rules own 4behalf 4 be Equity Act who Because showing 61 couldof combined Great potentially the participation care Social 0must benefit Securi also0and ftbe ry omvesting tand aken thepension 0red inprovisions uced assessing income participation 0 in the streams. most accuracy 0 plans provisions. These ofthethe data actual 0 could Of to definition the retirement -CWashington, schedules. impro entire ve women's of nation income Ninety D.C.: fourby security. pension terms percent U.S. increasing that Government benefits were Ifarethe they incrucial in plans cost Printing buy theaof with to near car our understanding Office, ,vesting, term products take and 1975) a vearly acation in and p. the the decreasing retirement 152. pension future? or pay issues off our or TO disdosures distributions / Ibid., comme p. nci of n 52 gfrom ,the w 56. hen tretiremen ypes emplof oyeetasse plans wt os uldheld and havein the reac pension disposal hed age portfolios. of 65.these assets. Our estima It tis es appropriate pension coverage policies without wouldadded be entax hanced incentives by better andanalysis some relaxation and agreeme of nexisting t on the than anticipate Socialtheir Security. careerThe willMay dovetail 1979 Current most neatly Population with Survey a particular (CPS)provides type of earlier cohorts t._ _of ._ wom < en. Thet._expansion A-6 _.3 ",_ of the pension _ _ "_system itself _ 0 is going 61 0 0 A-4 0 0 0 0 k o A-I 62 0 0 0 0 0 0 5. Underlying II.) _1 anneu 'lal r_ CN rat t_ e r,,]o r_ f r'i qnfl t_atio r,ln 6 = 5%. A-5 17 6/ Ibid., p. 49. 5 62 0 0 0 0 0 0 2 7 63 0 0 0 0 0 0 ii we take up here. 63 0 0 16240 0 0 0 i0 21 2O2214 64 0 0 23 0 25 0 0 0 26 15 18 ii 12 19 64 0 0 0 0 0 0 EMPLOYEE BENEFIT RESEARCH INSTITUTE 2121 K Street. N\V Suite _¢,0 \\a_hington, [)c 200_,7 Tcleph.ne /202) ¢_59-0e_70 EMPLOYEE BENEFIT RESEARCH INSTITUTE

Volume T-22

Pages 98

EBRI Testimony

Sept 29, 1983

Dallas Salisbury

Financial Wellbeing Retirement