50 Selected Pension Plans for Salaried Employees, Spring 1963

Transcription

1 D i g e s t o / 50 Selected Pension Plans for Salaried Employees, Spring 1963 UNITED STATES DEPARTMENT O F LABOR Bulletin No W. Willard Wirtz, Secretary BUREAU O F LABOR STATISTICS Ewan Clague, Commissioner

2 Digest of 50 Selected Pension Plans for Salaried Employees, Spring 1963 V U K Bulletin No August 1963 UNITED STATES DEPARTMENT O F LABOR W. Willard Wirtz, Secratary BUREAU O F LABOR STATISTICS Ewan Clague, Commissioner For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington 25, D.C. - Price cents

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4 Preface Contents Page This bulletin describes the principal features of 50 selected pension plans in effect in the early spring of 1963 covering salaried employees. It is designed to serve as a companion publication to the Bureau's Digest of 50 Selected Health and Insurance Plans for Salaried Employees, Spring 1963 (BLS Bulletin 1377, 1963). These 50 plans are not presented as model or typical plans, nor as a representative sample. They were selected to illustrate the plans of one or more major employers in each industry. All but one plan cover large numbers of workers; they range in size from coverage of a thousand workers to several hundred thousand. Index iv Explanatory notes 1 Selected pension plans under collective bargaining 6 Appendix 51 The present bulletin the Bureau1s first digest of pension plans covering salaried workers supplements the Bureau s Digest of One-Hundred Selected Pension Plans Under Collective Bargaining, Spring 1961 (BLS Bulletin 1307, 1962). It is expected that both of these digests will be revised at fairly regular intervals, thus providing up-to-date information and a continuous series of studies reflecting changes in specific employee benefit plans. The cooperation of plan administrators and other company officials is gratefully acknowledged, as is the assistance of the Department' s Office of Welfare and Pension Plans. The digest was prepared by Harry E. Davis, assisted by Stanley S. Sacks, under the supervision of Donald M. Landay, in the Bureau's Division of Industrial and Labor Relations, under the general direction of H. M. Douty, Assistant Commissioner for Wages and Industrial Relations.

5 Index Aluminum Co. of America American Airlines, Inc American Telephone and Telegraph Co. Borden Co., T he Burlington Industries, Inc. Campbell Soup Co Caterpillar Tractor Co. Chase Manhattan Bank, The Cluett, Peabody and Co., Inc. Consolidated Foods Corp. Crown Zellerbach Corp Detroit Edison Co., The Douglas Aircraft Co., Inc du Pont de Nemours, E. I. and Co.. Eastman Kodak C o. General Electric Co General Motors Corp. Gimbel Brothers, Inc Goodyear Tire and Rubber Co., The Greyhound Corp., The Hart, Schaffner and Marx International Business Machines Corp. International Harvester Co International Paper Co International Shoe Co. Page Page Kresge, S. S., Co Kroehler Manufacturing Co. 30 Lerner Shops of America, Inc. 30 McCrory Corp. (McCrory McLellan Green Stores Division) Melpar, Inc. (Subs, of Westinghouse Air Brake Co. ) 32 New York Times Co., The 32 North American Aviation, Inc. 34 Pacific Gas and Electric Co. 34 Pennsylvania Railroad Co. 36 Pfizer, Chas. & Co., Inc Pittsburgh Plate Glass Co. 36 Prudential Insurance Co. of Am erica 38 Radio Corp. of America 38 Research Institute of America, Inc. 40 Safeway Stores, Inc. 40 Sperry Gyroscope Co. (Division of Sperry Rand Corp. ) 42 Standard Oil Co. (New Jersey) 44 Stevens, J. P. and Co Swift &: Co Thompson, Ramo-Wooldridge, Inc Time, Inc Union Carbide Corp. 46 United States Lines Corp United States Steel Corp. 48 Weyerhaeuser C o lv

6 Digest o f 50 Selected Pension Plans for Salaried Employees, Spring 1963 Explanatory Notes Many terms and concepts used in this bulletin may be interpreted in different ways. For this reason, definitions and qualifications of some terms and concepts used in this digest are set forth below. Except for a few which have general application, the terms and concepts are grouped according to the section in which they first appear. It must be emphasized that a summary of a pension plan necessarily omits many of the features and administrative details contained in the agreements, contracts, and regulations which control the actual operation of the plan. The program applicable to most salaried employees is the one shown; exceptions are not indicated. Also, it should be noted that the program of benefits is described rather than each separate plan. Plans for Salaried Employees For purposes of this study, salaried employees include professional, administrative, technical, and clerical workers. Symbol Differences by Sex When used in this digest, this symbol means that the column is either not applicable or that the provision is not included under the program. Unless otherwise specified, the plan provisions apply uniformly to men and women. Reduction of Plan Benefits by Other Payments A number of plans described in this bulletin include provisions for reducing the private plan benefit by all or a part of income from other sources. Among these are old-age, survivors', and disability insurance benefits (social security benefits); workmen's compensation payments; unemployment insurance payments; benefits from other public programs (statutory payments); payments under other plans financed in whole or in part by the employer; and severance payments. For purposes of this digest, the only deductions accounted for are social security old-age benefits and social security disability benefits, where these deductions are stipulated in the plan. Full social security old-age benefits are payable to qualified workers 65. Workers may, however, elect to receive a permanently reduced social security old-age benefit to begin 62 or later. A worker who becomes disabled before age 65 so that he is unable to "engage in any substantial gainful activity" is entitled to a social security disability benefit. In summarizing plans for this bulletin, it was assumed that a worker retiring under the normal, early, and vesting provisions of a plan would not be receiving a social security disability benefit. Provision for deduction of social security disability benefit is noted only in the disability benefit formula column. The primary social security benefit is treated in the following manner: In the absence of a reference to the primary social security benefit in the normal benefit formula column, the plan benefit indicated is in addition to any primary social security benefit the worker may receive; an entry "less primary social security benefit, " or a similar entry in the normal benefit formula column, indicates that the plan benefit is reduced by the amount of such payment. 1 The term "when eligible, " as used in reference to the primary social security benefit, means that a reduction is made, or the benefit is recomputed, even though the worker does not elect to receive payments. In the plans studied, the normal benefit formula was generally used to compute benefits under early (also disability and vesting in some cases), based on service and/or earnings to date of. If the normal benefit formula includes a provision for deduction of primary social security benefit, the early benefit, unless otherwise indicated, will be reduced by an estimated primary social security benefit (even though the worker is not yet eligible to receive such benefit). In computing the illustrative monthly pensions it was assumed that workers with annual average earnings o f $4, 800 or more would receive the m axim um primary social security benefit o f $127 a month even though that benefit w ill not be payable, with a few rare exceptions, during the tim e period covered by the illustrations. However, many workers with m axim um taxable earnings will becom e eligible for slightly less than the maximum benefit.

7 2 Supplemental and Optional Contributory Plans Supplemental Contributory Plan. Refers to a plan that is offered to the worker on an optional basis, with the employer and worker sharing the cost. The benefits under such a plan are in addition to those provided under the basic noncontributory plan. Optional Contributory Plan. Refers to a plan that is offered to the worker on an optional basis, with the employer and worker sharing the cost. This is offered in lieu of the basic noncontributory plan. Years of This term applies to that service credited toward qualification, or for the purpose of computing benefits under the various plan provisions, however, service is defined in the plan. It may be described in the plan as continuous service, plan membership service, covered service, credited service, covered employment, years of service, consecutive service, etc. Earnings This term refers to the worker s compensation, however defined in the plan, used in the computation of benefits under the various plan provisions. It includes, among other terms, gross earnings, basic earnings, wages, pay, compensation, salary and basic annual wages or salary. Participation Requirements This term refers to the which the new worker must fulfill; i. e., period of service, minimum age, etc., in order to be covered by the plan, or to become eligible to participate in the plan. In the absence of such, the worker is eligible to join the plan upon becoming employed, or shortly thereafter. Normal Retirement Under a normal provision, the worker becomes entitled to a benefit, having otherwise qualified, upon reaching the normal age specified in the plan. In general, this age is defined as the earliest age at which the worker, having qualified for benefits, may choose to retire and receive the full benefit to which his length of service and/or earnings entitle him under the normal provision of the plan. Requirements. Refers to years of service, age, union membership, service in the industry, covered employment, etc., required to qualify for benefits. This definition is also applicable under the early, disability, and vesting provisions. Excludes Premembership. This phrase means that the worker s service prior to participation in the plan cannot be counted for the purpose of qualifying for benefits and/or in the computation of benefits. Includes Premembership. This phrase means that the worker s service prior to participation in the plan can be counted for the purpose of qualifying for benefits and/or in the computation of benefits. Illustrative Monthly Pensions for Future Illustrative monthly pensions were computed for purposes of general evaluation and comparison of potential benefits among the selected plans. In general, they reflect the anticipated benefit payments 20 to 30 years hence, on the basis of provisions currently in effect. Although the illustrative amounts shown are computed on the ba$is of future service under the currently existing formula, under many plans there is no distinction between future and past service benefits. Although some plan benefit formulas exclude primary social security benefits and others include such payments, only the benefit provided by the private plan is shown in the illustrative monthly pensions 65. Thus, private plan benefits for future service are shown on a comparable basis. To provide the illustrative amounts, benefits under the private plan were computed on the basis of arbitrarily selected average annual earnings levels (assumed to be constant throughout the period of service) and specific periods of credited future service. Selected for this purpose were future service periods of 20 and 30 years, and average annual earnings levels of $4,800, $10,000, and $15,000. Years of future service do not include participation as previously defined. Early Retirement Under an early provision, the worker can retire prior to the specified normal age and receive an immediate benefit. In contrast with normal, under which the right to retire is at the option of the worker, early in some plans is contingent upon the consent of the employer. Excludes Premembership. This phrase means that the worker's service prior to participation in the plan cannot be counted for the purpose of qualifying for benefits and/or in the computation of benefits. Includes Premembership. This phrase means that the worker s service prior to participation in the plan can be counted for the purpose of qualifying for benefits and/or in the computation of benefits.

8 3 Benefit Formula. Actuarial equivalent refers to a reduction in the benefit, computed on an actuarial basis, to reflect the longer period of benefit payment and shorter period of fund accumulation because of early. Normal and Early Retirement Benefit Options Under many pension plans, benefit payments cease when the pensioner dies. Increasingly, plans are providing optional methods of benefit payments, wherein the worker elects to receive a reduced benefit during his lifetime in order to provide for the continuation of some benefit to a designated beneficiary after his death. Under many plans the worker must make such a choice in a prescribed time prior to usually 5 years or pass a physical examination. The scope of this study was restricted to extension of optional forms under normal and early provisions, although they may also be applicable under disability and vesting provisions. Survivor. Under this provision, the pensioner receives a reduced benefit with a guaranty that if he dies while his beneficiary is living, payments at a predetermined rate will continue to the beneficiary for life. The actual provisions under which this option operates varies considerably among plans. For example, the beneficiary to be designated may be limited to the spouse; the benefit to be continued may be the same, one-half, or in some cases, any selected percentage of the amount of benefit the retired worker receives, etc. Period Certain. The pensioner receives a reduced benefit for life, but if he dies before receiving a specified number of payments, the balance is continued to his beneficiary. The most common option under this type is a 10-year certain payment (guaranty of 120 monthly payments), although shorter and longer certain payments are provided by plans in this digest. Cash Refund. Provides that if total benefits received by the pensioner are less than the purchase price of the benefit at, on his death the balance is paid to a designated beneficiary. Modified Cash Refund. Provides that if total benefits received by the pensioner are less than the worker's contributions (usually with interest), on his death the balance will be paid to a designated beneficiary. Level Income (Social Security Adjustment Option). The early provision of some plans contains an optional method of computing the benefit, the purpose of which is to provide a level income throughout. Under this option, a larger plan benefit is paid than actually due under the regular formula up to the time the social security benefit is received, so that the monthly payments received prior to that time and those received under the combined reduced plan benefit and social security benefit are equal. Disability Retirement The primary purpose of a disability provision is to permit the worker who becomes totally and permanently disabled before the normal age to retire with an immediate benefit. Some pension plans which do not specifically provide for a disability benefit may utilize the early or vesting provision to provide benefits to the disabled worker. Excludes Premembership. This phrase means that the worker's service prior to participation in the plan cannot be counted for the purpose of qualifying for benefits and/or in the computation of benefits. Includes Premembership. This phrase means that the worker's service prior to participation in the plan can be counted for the purpose of qualifying for benefits and/or in the computation of benefits. Requirements. In addition to minimum age and/or service, the worker must be totally and permanently disabled as defined in the plan. The definition may vary considerably among plans; no attempt was made in this study to analyze this aspect of disability. Benefit Formula. "At age 65, normal benefit payable," "Upon receiving social security disability benefit, or 65, normal benefit payable," and similar entries, indicate that the disability benefit is recomputed at that time and the normal benefit formula is used to compute the benefit payable thereafter. Vesting Vesting may be defined as a guaranty to the worker of a right or equity in a pension plan based on all or part of the employer's contributions made in his behalf should his employment be terminated before he becomes eligible for benefits. This equity, of course, would not be as large as if he had worked until normal age. Under all contributory plans in this report, the worker is permitted to withdraw his own contributions, with or without interest, when terminated. However, in all of these plans, withdrawal of the contributions means loss of benefits purchased by employer contributions. Also, in some of the contributory plans the terminated nonvested worker can elect to leave his own contributions in the plan and receive a benefit purchased by his own contributions. Excludes Premembership. This phrase means that the worker's service prior to participation in the plan cannot be counted for the purpose of qualifying for benefits and/or in the computation of benefits.

9 4 Includes Premembership. This phrase means that the worker's service prior to participation in the plan can be counted for the purpose of qualifying for benefits and/or in the computation of benefits. Types. Deferred full vesting is a provision under which the worker retains a right to all accrued benefits after he attains a certain age and/or completes a specified period of service. In deferred graded vesting, the worker has a right to a certain percentage of accrued benefits after he has fulfilled specified. This percentage increases as additional are fulfilled until the worker is entitled to the full (100 percent) benefit. Conditions. This term refers to the nature of the termination or separation under which vesting is permitted. Involuntary- Retirement Compulsory Retirement. For purposes of this study, compulsory age is th at which the worker can be retired by reason of age alone. It is that point at which the worker loses the privilege of deciding whether he should retire or continue in his job. A worker may, however, be permitted to continue employment on a year-to-year basis, in some cases subject to passing annual physical examinations or meeting standards of job performance. Automatic Retirement. For purposes of this study, automatic age is th at which the worker must cease his employment, the plan having irrevocably established this age as a maximum. Death Benefits Before and After Retirement. Entries in these columns are limited to the death benefits provided by the pension plan itself, including return of worker's contributions with or without interest. Benefits provided under group insurance and other plans are not within the scope of this study. Financing Information on the amount of contributions is provided to the extent that details are available in the literature describing the plan. No attempt was made to determine the actual amount of contribution or cost where the plan stated the employer paid the full cost or balance of cost. Medium of Funding Entries in this column refer to the organization, or type of organization, through which benefits are provided. Medium of funding is to be distinguished from the method of funding which refers to the technique by which the money required to provide the benefits is accumulated or budgeted. Trusteed; Bank Administered. This term is used to include both a bank, and trust companies (corporate trustees) with which contributions are deposited. Among the functions performed by the trustee are investments of funds and payment of benefits to eligible workers. Trusteed; Self Administered. A board of trustees or an individual trustee (not a bank or trust company) administers the trust fund. Functions performed are similar to those mentioned above. Insured; Group Annuity. An insurance company is selected to underwrite the benefits of the plan. Contributions (in the form of premiums) are made to the insurance company and paid-up units are purchased each year for each worker. Amount of income for each worker at is the sum of these paid-up units. Insured; Deposit Administration. An insurance company is selected to underwrite the benefits of the plan. Contributions (in the form of premiums) are held as a fund by the insurance company. There is no allocation to the account of the individual worker, but accumulated funds are used to purchase the benefit for each worker at in accordance with the provisions of the plan.

10 SELECTED PENSION PLANS FOR SALARIED EMPLOYEES 5

11 6 Selected Pension Plans Company Alum inum Com pany o f A m e rica. Participation Normal Illustrative monthly pensions at age 65 under normal formula excluding Social Security benefits and assuming average annual earnings of (years) $ 4,8 0 0 $ 1 0,0 0 0 $ 1 5,0 0 0 Plan I (vears) Early Salaried employees not under collective bargaining. *65 15 Monthly. 2 For service after Dec. 31, 1956, 0.5 percent of first $400 of average monthly earnings during 10 years immediately preceding date of final compensation and percent of monthly earnings exceeding! $400 for each year of such servic^; and for service prior to Jan. 1, 1957, 0.75 percent of first $350 of average monthly earnings for the years 1951 through 1956 and percent of such earnings exceeding $350 for each year of such service. $ $ $ $ $ $ with employer's consent (or combined age and service equals 80 or more) and absence j 15 and recall. Actuarial equivalent of normal benefit, commencing immediately; or normal benefit, commencing 65. Normal benefit except percent applied to average compensation until eligible for unreduced social security benefit, thereafter normal benefit. Normal benefit, commencing immediately.. $ for each year of service after Dec. 31, 1959, plus $2. 50 for each year of service prior to Jan. 1, i960, to a maximum of 40 years of service. Maximum. Via of 45 percent of the average of highest 5 amounts of annual compensation. Plan II Salaried employees under collective bargaining. Same as above. Monthly Via of percent of compensation6 less $80 for primary social security benefits.. Same as above. $ $ $ $ $ $ j 15 at worker's request. Actuarial equivalent of normal benefit, commencing immediately; or normal benefit, commencing Normal benefit, commencing immediately. and termination.7 or or and recall and combined age and service equals 75 or m ore (or combined age and service equals 80) and absence. 8 Normal benefit except no offset for prim ary social security benefit until eligible for un-* reduced social security benefit, thereafter normal benefit. 1 No service credited after age Benefit payments start the fourth full month following. A lum p-sum benefit equal to 13 weeks of vacation pay less any vacation pay received in year of is paid at time of v 3 Lum p-sum benefit not payable. Employee must be: (a) Absent 2 years due to layoff, sickness or accident commencing on or after Aug. 1, I960; or (b) absent less than 2 years due to (1) permanent shutdown of plant, department or substantial portion thereof, or (2) elimination of position by reason of technological changes, reorganization, or realignment of personnel; or (c) mental or physical conditions prevent from performing position satisfactorily and qualified physician certifies that employee should no longer be burdened with responsibilities of job.

12 7 for Salaried Employees Normal and early benefit options (years!. Disability Type, conditions, and minimum Vesting Involuntary Compulsory Plan I Auto- Before Death benefits After Employee Financing Employer Medium of funding survivor. 15 Normal benefit, commencing immediately. ($80 offset for social security disability benefit, only if eligible th ere fo r.) Deferred full. Laid off and not recalled within 2 years or term i nated for any reason.. 3 Greater of: (1) $100, less 40 and 15 $80 for social security disability bene years of service. fit, or (2) $ times years of service after Dec. 31, 1959, plus $ times years of service prior to Jan. 1, I960 to a maximum of 40 years. Normal benefit, 3 commencing at age Full cost. Trusteed; bank administered. At age 65, normal benefit payable. Normal benefit, commencing immediately.. Same as above. At age 65, normal benefit payable. Deferred full. Laid off and not recalled within 2 years or terminated for any reason other than discharge for just cause. Same as above. Plan II T Sam e as a bove. 40 and 15 years of service Satisfactory conditions when laid off and little likelihood of recall. 6 Compensation for service prior to Jan. 1, 1944, based on compensation for Terminated as result of permanent shutdown of plant, department or substantial portions thereof, or absence due to layoff or physical disability for 5 years. 8 Employee must be: (a) Absent 2 years due to layoff, sickness or accident commencing on or after Aug. I, I960; or (b) absent less than 2 years due to (1) permanent shutdown of plant, department or substantial portion thereof, or (2) absent due to sickness, accident or layoff and return to work declared unlikely by company; or (c) is in mutual interest of employee and company.

13 8 Selected Pension Plans Company Participation A ~ I ( v e». ) Normal Illustrative monthly pensions at age 65 under normal formula excluding Social Security benefits and assuming average annual earnings of $ 4,8 0 0 $ 1 0,0 0 0 $ 1 5,0 0 0 (years) Early American Airlines, Inc. 25 and 1 year of service. 65 Monthly percent of monthly earnings subject to social security tax (currently $400) and 2 percent of monthly earnings exceeding such amount for each year of s e rv ic e.12 3 $ $ $ $ $ $ at worker's request. Actuarial equivalent of normal benefit, commencing im m e diately. American Telephone and Telegraph Co. Men 60 I or 55 j *25 or 5 30 Monthly. 1 percent of average monthly earnings during 5 consecutive years immediately preceding (at benefit com m ittee's discretion, 5 consecutive years of highest earnings) times years of service, less one-half prim ary social security benefit when eligible. $ $ $ T55T50 $ $ See normal. Women or 50 *25 or While under age 65 $85; 65 with 20 but less than 30 years of service at date of $115; 65 with 30 but less than 40 years of service at date of $120; 65 with 40 or more years of service at date of $125; less one-half primary social security benefit when eligible. 1 No service credited after age Excludes premembership service. 3 Company allows retiree to elect a higher monthly benefit in lieu of the modified cash refund annuity. 4 At worker's request or at discretion of benefit committee. 5 With approval of benefit committee.

14 9 for Salaried Employees N orm al and e a rly ben efit options M inim um S e rv ice (y e a rs) D isability Benefit form ula Typ e, conditions, and m inim um requirem en ts Vesting Involuntary Com pul- Autom a tic B efore Death b en efits After Em ployee Financing Em ployer M edium o f funding su rv iv o r. P e r io d certa in. L e v e l incom e (e a rly ) M onthly. 1 p ercen t o f a v era g e m onthly earnings during 3 y e a rs im m edia tely p re ce d in g retirem en t fo r each year of servic e to a m axim um o f 25 y e a r s. M inimum. $65. A t age 65, norm al b en efit p aya ble. D eferred graded. Term inated for any reason. A ge 45 and 10 y ears o f s e r v ice o r 15 years of s e r v ic e. 50 p ercen t vested, plus 10 p e r cent fo r each additional yea r of age and s e r v ic e o r s e r v ic e only to 100 p e rce n t at age 50 and 15 y e a rs, o r 20 years o f s e r v ic e. A ctu a ria l equivalent o f n orm a l benefit anytim e during 10-y e a r p e rio d p r io r to age 65, o r n orm al benefit W o rk e r's contribu tions plus in terest. W o rk e r's contribu tions plus in terest, le s s ben efits r e ce iv e d. 3 3 p e rcen t of annual e a r n ings su b ject to s o c ia l s e cu rity tax (cu rre n tly $ 4,8 0 0 ), and 6 p erce n t of earnings e x ceeding such am ount. B alance o f cost. Com bination: T rusteed. Insured Sam e as n orm a l b en efit. M inim um. If not e ligible fo r norm al bene fit by rea son o f age and s e r v ic e but with 20 o r m o r e y e a rs of s e r v ic e, $85 p r io r to age 65 le s s on e -h a lf socia l security benefit that is granted, at age 65, $115. M inim um, if e lig ib le fo r n o rm a l b en efit, $85 to age 65; 65, $115 le s s o n e-h a lf s o c ia l se c u r ity benefit. 65 (67) Annual earnings at r e tirem en t reduced 10 p e rce n t fo r each fu ll year elapsed since r e tirem en t; m inim um am ount equal to annual pen sion. A t d is c re tio n o f ben efit com m ittee, up to 12 months of earnings paid. F u ll cost. S erv ice pensions: T rusteed; bank a d m inistered. D isability pensions and death benefits: Unfunded. 6 Total disability as result of sickness or injury, other than accidental injury arising out of and in the course of employment. 7 (1) 3 y e a rs o f earnings to m axim um o f $ 3 0,0 0 0, o r amount payable under sick n ess death benefit (s e e (2) below ), w h ich ever is g re a te r fo r death by occupational a ccid en t plus $500 burial b en efit. (2) 4 m onths o f earnings fo r 6 m onths but le ss than 2 y ears o f s e r v ic e, in cre a sed by 2 m onths o f earnings fo r each additional y e a r o f s e r v ic e to 12 m onths o f earnings fo r 5 o r m ore years, or $500, w hichever is greater for death by other cause.

15 10 Selected Pension Plans Com pany P a rticip a tion M inim um S e rv ice (y e a rs) N o rm a l re tire m e n t Illu stra tiv e m onthly pensions at age 65 under n orm a l form u la excluding Social Security b en efits and assum ing average annual earnings o f $ 4,8 0 0 $ 1 0,0 0 0 $ 1 5,0 0 0 M inim um S e rv ice (y e a rs) E a rly re tire m e n t B en efit fo rm u la N oncontributory plan The B orden Co. B a sic plan M onthly. F o r s e r v ic e after M ar. 31, I960, $2. 25 fo r each y ea r o f such s e r v ic e ; fo r s e r v ic e p r io r to A p r. 1, I960, $2 fo r each y e a r o f such s e r v ic e. A fte r 20 y e a rs o f future s e r v ic e $ $ $ A fter 30 v e a rs of future s e r v ic e $ $ $ it w o rk e r's req u est. N o rm a l ben efit red u ced 6 p e rce n t fo r each yea r under age 65, c o m m encing im m ediately. C on tributory plan. 2 y e a rs o f s e r v ic e and annual earnings e x c e e d ing $ 4, 800. l 65 M onthlv. F o r each v ea r o f s e r v - ice after M ar. 31, I960, approxim a tely 1. 5 p e rce n t o f m onthly earnings exceed in g $400; fo r each y e a r o f s e r v ic e betw een O ct. 1, 1956 and M ar. 31, I960, approxim a tely 1. 5 p e rce n t o f m onthly earnings exceed in g $350, and fo r each y e a r o f p r io r s e r v ic e, 1 percent of monthly earnings. A fte r 20 v e a rs o f future s e r v ic e $ $ A fte r 30 v e a rs o f future s e r v ic e $ $ it w orker's request. Sam e as above. Burlington Industries, Inc. A ge 25 and 2 y e a rs o f s e r v ic e M onthlv p e rce n t o f m onthlv earnings su b ject to s o c ia l se cu rity tax (currently $400) and 1. 5 p e r cent o f m onthly earnings exceed in g such am ount fo r each y ear o f s e r v ic e. 123 A fter 20 v e a rs o f future s e r v ic e $ $ $ A fter 30 v e a rs o f future s e r v ic e $ $ $ at w o rk e r's request. A ctu a ria l equivalent o f n o rm a l b en efit, co m m e n cin g im m e d i ately ;4 or norm al benefit, com m encing A ll service credited after age No s e r v ic e cred ited after age Excludes prem em bership service.

16 11 for Salaried Employees N orm al and e a rly ben efit M inim um S e rv ice (y e a rs) D isability Benefit form ula Type, conditions, and m inim um requirem en ts Vesting Benefit form ula Involuntary Com pulsory Autom a tic B e fo re Death benefits A fter Em ployee Financing Em ployer M edium o f funding N oncontributory plan su rv iv o r. P e r io d certa in N orm al benefit, payable im m ediately. D eferred full. T erm inated for any rea son. A ge 55 and 15 y e a rs o f s e r v ic e. A ctuarial equivalent o f n orm a l b en efit, c o m m e n c ing anytim e during 10 y e a r p e rio d p r io r to age 65; o r n orm a l b enefit, com m en cin g at age 65. F u ll cost. T rusteed; bank adm iniste re d. C on tributory plan S a m e a s a bov e. D e fe rred full. Term inated for any reason. Sam e as a bove. W o r k e r 's contribu tions plus in terest. W o rk e r's contribu tions plus in terest, le ss benefits r e ce iv e d. 5 p e rce n t o f annual e a r n ings e x c e e d ing $4, 800. Balance o f cost. Sam e as above. 15 y ea rs o f s e r v ic e. su r v iv o r. P e r io d ce rta in. M od ified ca sh refund. L e v e l incom e (e a rly ). Sam e as e a rly r e t ir e m ent benefit. 45 Im m ediate full. Involuntary te r m i nation. Sam e as d isa b ility benefit. 65 A ctu a ria l equivalent of a ccru e d p ension payable in a lum p sum. W o rk e r's contribu tions le s s b en efits r e c e iv e d p e rce n t of annual earnings su b je c t to s o c ia l secu rity tax (cu rre n tly $ 4,8 0 0 ), and 3 p e rcen t o f earnings ex ceeding such amount. Balance of cost. T rusteed; bank adm inistered. 4 Em ployee m ay request such amount in a lump sum. 5 If disability occu rs prior to age 55, em ployee has option of receiving actuarial equivalent of norm al benefit or a lump sum, or norm al benefit if deferred to age Not provided if em ployee elects joint and survivor or period certain option.

17 12 Selected Pension Plans Com pany P a rticip a tion M inim um A S e rv ice (y e a rs) Norm al Benefit form ula Illu stra tiv e m onthly pensions at age 65 under n orm a l fo rm u la excluding Social Security ben efits and assum ing a verage annual earnings o f $ 4,8 0 0 $ 1 0,0 0 0 $ M inim um S e rv ice (v e a r s ) E a rly re tire m e n t B en efit fo rm u la Cam pbell Soup Co. 5 y e a rs o f s e r v ic e M onthly. F o r s e r v ic e after D ec. 31, 1958, 1 p erce n t o f m onthly earnings su b ject to so c ia l s e cu rity tax (cu rren tly $400), and 1. 5 p e rce n t o f m onthly earnings exceed in g such am ount fo r each y e a r o f s e r v ic e ;12 3 fo r s e r v ic e p r io r to Jan. 1, 1959, g rea te r of: (1) 1 percent of average annual earnings up to $ 4, 800 and p e rce n t o f such earnings e xceed in g $ 4,8 0 0 fo r each y e a r o f s e r v ic e aftejr age 35, and (2)110 p e rcen t o f benefits a ccru e d p r io r to Jan. 1, A fter 20 y e a r s o f future s e r v ic e $ $ $ A fter 30 years of future service "$ f $-502; with e m p lo y e r 's consent. A ctu a r ia l equivalent o f n o rm a l benefit, com m encing im m e d ia tely ; o r n orm a l ben efit, com m encing 65. M in im um. $25 p e r m onth, plus $ p e r m onth fo r each y e a r o f s e r v ic e in e x ce s s o f 15 y e a rs. C a terp illa r T r a c to r Co. A g e 30 and 5 y e a rs o f s e r v ic e M onthly. 1 p e rce n t o f m onthly earnings subject to social secu rity tax (cu rren tly $400), and 2 p e rce n t o f m onthly earnings e x ceed in g such am ount fo r each y e a r o f s e r v ic e. 2 A fte r 20 y e a rs o f future s e r v ic e $ $ $ A fte r 30 y ea rs o f future s e r v ic e $ $ $ at w orker's request. N o rm a l b en efit reduced by a d e c r e a s in g p e rcen ta g e fo r each y e a r r e tir e m e n t p r e c e d e s age 65, 4 co m m e n cin g im m ed ia tely. M inim um. F o r s e r v ic e a fter N ov. 30, 1955, 1 p e rce n t o f m onthly a v era g e o f total e a r n ings during 10 y ea rs im m ed ia tely prece d in g retirem en t fo r each y e a r o f s e r v ic e, 2 le s s p rim a ry social security benefit; for se rv ice p r io r to D ec. 1, 1955, 0.75 p ercen t o f fir s t $350 o f m onthly earnings and 1. 5 p ercen t o f m onthly earnings exceed in g $350 fo r each y ear o f such s e r v ic e. 2 M axim um. m onth. $4, p e r 1 No s e r v ic e cred ited a fte r age Excludes prem em bership service. 3 Includes prem em bership service. 4 Reduction ranges from 8.4 percent (7. 2 percent for women) for em ployees retiring 64 to percent (49. 8 percent for women) for em ployees retiring 55.

18 13 for Salaried Employees N orm a l and e a r ly b en efit options M inim um S e rv ice A ge (y e a rs) D isa b ility r e tirem e n t V esting Involuntary Type, conditions, Com pul- Autom a tic requirem en ts B efore Death benefits After Em ployee Financing Em ployer M edium of funding su r v iv o r. P e r io d ce rta in. L e v e l incom e (e a r ly ). 55 A ctu a ria l equivalent o f n o rm a l benefit, com m e n cin g im m e d ia tely. D eferred full. Term inated fo r any reason. 5 y ea rs o f s e r v ic e. 3 N orm a l b enefit, com m en cin g at age A fte r age 55, 60 m onthly paym ents fo r w hich w o rk e r was qualified at tim e of death. 60 m onthly paym ents le s s benefits rece iv e d. F u ll co s t. Com bination: T rusteed; bank adm inistered. Insured. su r v iv o r. P e r io d ce rta in. L e v e l incom e (e a r ly ). D eferred full. T erm inated for any reason. 10 y e a rs o f s e r v ic e. (2) (s ) N orm a l benefit, com m en cin g at age 65. (5) (6) (6) F u ll co s t. Com bination: T rusteed; bank adm inistered. Insured; deposit adm inistered. 5 P lan p r o v id e s a d e fe r re d d isa b ility pension 65 fo r w o rk e rs qualified fo r plan p a rticip a tion. W ork er disa b led anytim e p r io r to age 65 and who rem ain s d isa b led until age 65 r e c e iv e s, 65, a b en efit equal to the sm a lle r of: (1) The norm al benefit the w ork er w ould have r e c e iv e d had he w orked up to age 65, o r (2) 3373 p e rcen t o f m onthlv earnines m axim um ^ $ 1, 389 p e r m onth. y 5 6 Contributory plan in effect prior to Dec. 1, If w orker did not withdraw contributions as of that date, a benefit, if death occurs before is paid to beneficiary, consisting of w ork er 's contributions plus interest; after, w orker's contributions plus interest, less future service benefits received.

19 14 Selected Pension Plans Com pany P a rticip a tion M inim um S e rv ice (y e a rs) N orm al Benefit form ula Illu stra tiv e m onthly pensions at age 65 under n orm a l form u la excluding Social Security ben efits and assum ing average annual earnings o f $ 4,8 0 0 $ 1 0,0 0 0 $ 1 5,0 0 0 M inim um S e r v ic e (y e a rs) E a rly re tire m e n t B en efit fo rm u la The Chase Manhattan Bank M onthlv p e rcen t o f a vera ge m onthly earnings during 5 y e a rs im m ed ia tely p reced in g retirem en t (o r a v era g e s a la ry during entire p e rio d o f s e r v ic e ) tim es y e a rs o f s e r v ic e, le s s o n e -h a lf p rim a ry s o c ia l s e cu rity benefit. M inim um. $1 tim es v e a rs o f s e r v ic e. M axim um s e r v ic e credited, 20 years. A fter 20 y e a rs o f future s e r v ic e $ $ $ A fte r 30 y e a rs o f future s e r v ic e $ $ $ o r o r ait w o rk e r's requ est. N o rm a l b en efit; p o rtio n o f benefit attribu ta ble to s e r v ic e a fter M a r. 31, 1957; reduced 6 p e rce n t fo r each y e a r under a ge 65, p o rtio n o f b en efit attribu ta ble to s e r v ic e p r io r to A p r. 1, 1957; red u ced 3 p e r c e n t fo r each y e a r under age 65 and 5 p e rce n t fo r each y e a r under age 60. M axim um. 60 p e rce n t o f a vera ge m onthly earnings, including o n e - half p r im a ry s o c ia l se cu rity b enefit. Cluett, P ea body, and Co., Inc M onthlv p e rcen t o f a vera ge m onthly earnings o f 5 con secu tiv e y e a r s o f highest earnings during 10 y e a rs im m ed ia tely p reced in g re tire m e n t fo r each y ea r o f s e r v ic e. N oncontributory plan A fte r 20 v e a rs o f future s e r v ic e $ $ $ A fte r 30 v e a rs of future s e r v ic e $ $ $ at w ork er 's request. A ctu a ria l equivalent o f n o rm a l b en efit, com m e n cin g im m ed ia tely ; o r norptial ben efit, com m en cin g at age 65. M aximum. $2, Contributory plan 7 A g e 30 and 1 y e a r o f s e r v ic e M onthlv. Vi* o f 25 p e rcen t o f em ployee*s total contributions. A fte r 20 v e a rs o f future s e r v ic e $ $ $ A fte r 30 v e a rs o f future s e r v ic e $ $ $ < same as a b ove. Sam e as above. C on solidated F ood s C orp. A ge M onthlv p e rce n t o f a vera ge m onthly earnings exceedin g $350 fo r each y e a r o f s e r v ic e. M inimum. $20 per month. A fte r 20 v e a rs o f future s e r v ic e $ $ $ A fter 30 v e a r s o f future s e r v ic e $ $ $ at w o rk e r's requ est. A c tu a ria l equivalent o f n o rm a l benefit, com m encing im m ediately. 1 No service credited after age 65, how ever, if is after age 65, the benefit the em ployee is entitled to 65 is increased 3 percent for each year em ployee rem ains in se rv ice a fter age Initial age requirem ent is 55 and w orker m ay retire, up to age 59, if sum of age plus service equals or exceeds Em ployee m ust be age 60 or older or com bined age and service m ust equal 80 to be covered. 4 No s e r v ic e cre d ite d a fter age Options m ay be elected as a pre death benefit effective after age 55.

20 15 for Salaried Employees N orm a l and e a r ly b en efit options M inim um S e rv ice A ge (y e a rs) D isability Benefit form ula T yp e, conditions, and m inim um requirem en ts Vesting Benefit form ula Involuntary Com pulso ry A utom a tic B efore Death ben efits After Em ployee F inancing Em ployer M edium o f funding su rv iv o r. L e v e l incom e (e a rly ). Sam e as n orm a l b en efit p e rcen t o f re tire m e n t benefit e m p loyee entitled to at tim e of death. 3 F u ll co s t. T rusteed; bank adm iniste re d. N oncontributory plan 15 N orm al benefit, com D eferred full. Actuarial equivalent 65 (6) (6) Full cost. Trusteed; survivor. m encing im m ediately. of norm al benefit, bank admin Terminated for any com m encing any istered. P eriod reason. tim e during 10 year c e rta in. 5 p e rio d p r io r to age A ge 45 and 20 y ea rs 65; or norm al bene L evel of service ; or age fit, com m encing at in co m e 50 and 15 y e a rs o f age 65. (e a r ly ). s e r v ic e. Contributory plan 7 Sam e as above. 15 Same as above. Same as1 above. Same as above. 65 W o r k e r 's contribu tions plus in te re st. W o r k e r 's contribu tions plus in te re st, le s s benefits r e ce iv e d. 5 p e rcen t o f B a lan ce annual e a r n o f cost. ings in e x c e s s o f $ 4, 800. Sam e as above. M inimum. $15 p e r annum. s u rv iv o r. L e v e l incom e (e a rly ). D eferred graded. Term inated fo r any reason. A ge 50 and 15 years of service, 50 p e r cent; age 55 and 15 y e a rs o f serv ice, 75 p ercen t; age 60 and 15 y e a rs of s e r v ic e, 100 p e r cent. A ctu a ria l equivalent o f n orm a l b enefit, com m en cin g 60; or norm al benefit, com m en cin g at age F u ll cost. T rusteed; self adm iniste re d. 6 Contributory plan in effect from January 1940 through January 1952 finances higher benefits for w orker who did not withdraw his contributions. A benefit, if death occurs before retirem ent, is paid to beneficiary, consisting of w orker's contributions plus interest; after, w ork er's contributions plus interest, less benefits received. 7 Only salaried em ployees earning in excess of $4,800 per annum are eligible for plan. 8 Participants contributing to plan as of Jan. 1, 1961, whose annual com pensation is less than $4,800 m ay contribute 5 percent of earnings in excess of $3,600; and those whose contributions am ount to le s s than $60 p e r annum m ay contribu te $60 p e r annum. 9 A ll service up to age 70 credited.

21 16 Selected Pension Plans Com pany P a rticip a tion M inim um S e rv ice (y e a rs) N orm al Benefit form ula Illu stra tiv e m onthly pensions at age 65 under n orm a l form u la excluding Social Security b en efits and assum ing average annual earnings o f $ 4,8 0 0 $ 1 0,0 0 0 $ 1 5,0 0 0 M inim um S e rv ice (y e a rs) E a rly re tire m e n t B en efit fo rm u la Crow n Z e lle r b a ch C orp. 5 y e a rs of s e r v ic e M onthly. V12 o f p e rce n t o f the f ir s t $ 3,0 0 0 o f annual e a r n ings and V12 o f 1.5 p e rce n t o f annual earnings ex ceed in g such am ount fo r each y e a r o f s e r v ic e.2 M inim um. F o r 5 o r m o r e y e a rs o f s e r v ic e 3 : (1) B a sed on s e r v - ice- $ a m onth fo r each y e a r o f s e r v ic e to a m axim um o f 20 y e a r s, o r (2) b ased on t e r - m in a l earnings A/i2 o f 1. 5 p e r - cent o f a v era g e annual earnings during highest 5 con secu tiv e ca len d a r y e a rs out o f la st 10 calendar years im m ediately p re ced in g re tire m e n t fo r each y ea r o f s e r v ic e to a m axim um o f 33A/3 y e a rs o f s e r v ic e, le s s 75 p erce n t o f p r im a ry s o c ia l s e c u r ity b e n e fit. A fter 20 y e a rs o f future s e r v ic e $ $ $ A fte r 30 y e a rs o f future s e r v ic e $ $ $ o r o r 60 5 a t w orker s request. P e r c e n t (as set fo rth below ) o f n o rm a l ben efit, com m en cin g im m ediately, 5 or norm al benefit, com m encing 65. A g e at r e tirem e n t P e r c e n t paya ble M axim um. m onth. $ 1, p e r Noncontributory plan The D etroit Edison C o. 6 m onths o f s e r v ic e M onthly. F o r s e r v ic e after M ar. 1, 1943, 1 percent of a verage m onthly earnings during 5 y e a rs o f highest earnings tim es y e a rs o f s e r v ic e ;3 fo r s e r v ic e p r io r to A p r. 1, 1943, g rea ter of: (1) V12 o f 1 p e rcen t o f annual earnings at A p r. 1, 1955, tim es y e a rs o f such s e r v ic e, o r (2) V12 o f 1 p e rce n t o f tim e s the highest annual earnings p r io r to A p r. 1, 1949, fo r ea ch y e a r o f such service, or (3) V12 of 1 p e r cent of tim es annual earnings fo r the y e a r im m ed ia tely p re ce d in g A p r. 1, 1943, fo r each y e a r o f such s e r v ic e. A fte r 20 y ea rs o f future s e r v ic e $ $ $ A fte r 30 y ea rs o f future s e r v ic e $ $ $ a.t w orker's request. A ctu a ria l equivalent o f n o rm a l benefit, com m encing im m e dia tely ; o r n o rm a l ben efit, com m encing 65. M inim um. F o r 15 o r m o r e y ears o f s e r v ic e 3 $40. Supplemental plan 9 65 M oney p u rch a se plan. A fte r 20 y e a rs o f future s e r v ic e ( 10) A fte r 30 y e a rs o f future s e r v ic e < > 1 No service credited after age 65, except for minimum $2. 50 a month for each year of service to a maximum of 20 years of service. 2 Excludes premembership service. 3 Includes premembership service. 4 and service between ages are as follows: 56 and 18 years; age 57 and 16 years; age 58 and 14 years; and age 59 and 10 years. 5 benefit applicable to workers retiring 62 and over with 5 or more years of service.

22 17 for Salaried Employees N orm al and e a rly retirem en t benefit options M in im um S e rv ice A ge (y e a rs) D isability Benefit form ula Typ e, conditions, and m inim um requirem en ts Vesting Benefit form ula Involuntary Com puls o r y A utom atic B e fo re Death b en efits A fter Em ployee Financing Em ployer M edium o f funding 15 A ctuarial equivalent D eferred full. N orm al benefit, 65 W orker s contributions $ 1, 000 lump sum plus 2 percent of Balance Trusteed; survivor. of norm al benefit, com m encing plus interest. w orker's contributions first $3, 000 of cost. bank or com m encing im m e - Term inated for 65 (minimums not plus interest, less of annual adminis - P eriod diately. 3 any reason. applicable ). benefits received. earnings and tered. certa in. e lig ib le fo r 4 p e rcen t of early re tire - Same as early 40 and 20 earnings ex M odified fnent.. 7 years of service ceeding such cash am ount. refund. L e v e l in co m e 56 (e a rly ). N oncontributory plan su r v iv o r F u ll cost. T rusteed; bank adm inis - tered. Supplem ental plan Sam e as above. W o rk e r's contribu tions plus in terest. 60 m onthly paym ents, le s s benefits re ce iv e d. $ 1 p e r w eek and up in units o f $ 1 up to 10 p e r cent of sa la ry. Insured; group annuity. 5 M inimum benefit applicable to w orkers retiring 62 and over with 5 or m ore years of service. 6 Level incom e option only available to worker retiring prior to age If eligible for early, m ore liberal percentages of the norm al benefit m ay be provided at the discretion of the plan com m ittee. 8 Initial m inim um age requirem ent is 40 and w orker is fully vested if sum of age and service, including prem em bership service, equals No se rv ice credited after age Noncom putable m oney purchase plan.