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Cedar Rapids Gazette (Newspaper) - September 11, 1974, Cedar Rapids, Iowa The greof fiasco Massive abuses, tiny reform By William V. Shannon WASHINGTON Figuratively speaking, members of congress nearly broke their arms last week pat- ting themselves on the hack for passing the private pension bill. 1'residenl Ford even helicoptered in from Camp David nil Labor day to sign it. In a regrettable leap into hyperbole worthy of the late Lyndon B. Johnson the President said: "This legislation will probably give more benefits and rights and success in the area of labor-manage- ment than almost anything in the history of our country." The reality is much drearier. The hill is a small reform, correcting a few of the worst abuses of private pension plans. But for most workers who are nomi- nally covered by private plans fewer than half are such plans remain what they have always been: a lottery in which most lose and the winners get only a pit- tance. A critical section of the new law concerns "vesting." A worker who leaves a pension-covered job has a vested right to a pension if he has worked for a company for a specific length of time. Under the new law, a firm has to give a William V. Shannon worker full rights to his pension after 10 years of employment, alternatively, it can give him a right to 25 percent of his pension after only five years with his stake increasing gradually until he is ful- ly vested after 15 years of employment. At first glance, years of employ- ment may seem a reasonable prerequi- site. But a senate study of companies that already had such a provision showed that three-quarters of the workers who quit or were fired by those companies left without any pension rights. Money had been regularly credited in their names in those private pension funds, 1 but they never collected a dime. It is hard for people to realixe that these- plans are financed on the assumption that many participants will never collect. What about the right to 25 percent of one's ixmsion after five years? It is one Views Ideas Judgments Comments Opinion Page 2 of (hose rights that sounds a lot better than it turns out to be in reality. A private pension for a white-collar employe is arrived at by multiplying the number of years he has worked under the plan by a percentage of his annual that will) social security where one out of every three persons collecting a pension is a surviving dependent, and where a widow gels the same basic pension her husband received. The sad truth is that private pension plans are one of capitalism's bad ideas. salary, typically one and one-half per- Such plans make sense for a few high- cent. (Plans for blue-collar workers use a flat sum per worker rather than a percenlage and usually produce even more meager benefits.) Thus, a worker salaried executives. But in extending them to lill their workers, most compa- nies find they simply do not have the economic base to provide a decent rcli- their earning a year who leaves his job able pension to their workers and after five years multiplies his salary by survivors. If these plans did not his length of service for a total of One and one-half percent of that is of which he has a vested right under the new law to one-quarter or a year when he is 85. With a pension like-that, he'll never make it to Miami Beach. most of the participants out of substantial benefit, they would bankrupt. Deficits any g" Nonsensical In short, private pension plans arc all rigged in favor of the worker who spends most of his working life with one firm. In this fast-moving, technologically innovative economy, it makes no sense for society or for the individual worker to encourage plans that re- ward the standpatter. The economy ben- efits if labor is reasonably mobile. As for the worker, how can a voung man of M know today whether it is in his best in- terests to stick with the same company until he is eligible for his pension in the year Despite all the talk about women's the new law once again leaves women holding the bag. If a male worker dies in his late fifties, his widow gels no pension. If he lives to retirement and is already receiving a pension and then dies, she gets only half of what lie was getting. As it is. many pension plans are technically insolvent. If the stock market keeps going through the wringer, the pension plans of some very reputable companies are going lo be in terrible trouble. A study last year found that the pension funds of 1175 companies are on paper in deficit by more than II bil- lion. In the eight months since that sur- vey, conditions have worsened. Home pension funds are heavily invested in the glamorous growth stocks such as IBM. Xerox, Polaroid, and Avon whose share prices have suffered a sickening decline. Pensions arc a job for the govern- ment because only the government has the ultimate resources to underwrite an adequate system. When will union lead- ers and politicians stop trying to patch up the unpatchable and tell people the truth? Moreover, she gels that one-half only if her husband had allowed her benefit option to stand. Experience has shown thai many workers reject that option because it means the pension during their own lifetimes will be drastically smaller. Only two percent of widows collect pensions from private plans. Contrast But the bridge still needs work By Jim Fiebig YOUTH MAY NOT be totally wasted on the young if a refreshing piece of legislation introduced by Hep. Donald M. Frascr (D-Minn.) gets the reception it deserves. Fraser proposes that people who've paid into the social security trust fund for at least 10 years be allowed a year off from work at government expense. as always, is a misnomer. The American enjoying such a sabbatical leave would only be recoup- ing a small portion of the financial loss the system imposes.) A year s relief from the workaday grind is not only a fine idea, it is really only fair. The social security system is a ripoff, a flimflam and a squandering Ihief that at current rales forcibly extracts tens of thousands of dollars from a worker over his lifelime. Not only does the victim fail to receive a cent of interest on this money bul Ihe odds are against his getting even half of his "investment" back before death. But all that aside, Fraser's plan is worthy just because it would do wonders for the human spirit. One of the great frustralions of life is that we really don't get a chance to embrace it until our bodies are no longer in prime time. Many retirees work 40 years for the opportunity to reach for the brass ring then find they can't even get on the merry-go-round. Think of it. A precious 12 months to step back on strong legs and take a quiet, healthy look at life. To smell the flowers, lo recharge our batteries, to put our thoughts in order. II would he a very good year. GiMHMol Coroorolion Unmatched safety record By Don Oakley II-' YOlt live neal a nuclear power planl. the chances (if heini; killed by a reactor accident are one in million. Thai compares will] odds of one in lu'ii million of hit by and one in of beiiiH involved in an an- lomohilo aeeidcnl. "Tile fact is Ilia! nuclear accidonl probabilities are so low they arc in- significant compared In Ihe nvci-all risks due lo olhcr uian-madc and natural according In Ihe recently re- leased draft reporl of a slndy commis- sioned by Hie Atomic Kneoy I'ommis- siun The two-year. slndy is Ihe niiisl comprehensive CUT made of nude ar power plaiil safely, says Ihe AMI'. There are now about 50 cnmmerenl nuclear power planls in operation. There have been no aeeidenls. Ahoiil Hill roac- tors are expected lo be working by UIXII. Ibis basis, the study estimates Hie probability of a nuclear core mHUiii; and releasing radioaclivo materials as once every 17S years. But only one mil of III polential core-mell aeeidenls would have measurable health effects, and Ibal would occur on the average of once1 every 17 cenluries. Such has been Ihe extraordinary safely record of Ihe unclear industry lhal Ihe two insurance pools which provide linhilily uisiiraue' for every ulilily-op- eraled nuclear rcaclor and all pmalcly-nperalcii research and develop- menl reaclors in Hie Hulled Males have ins! made premium reiunds of nearly million. I 'ruler lire system used by the pools Ihe Nuclear Kiioniy Liability Insurance Assn (NKI.IA) and Mutual Atomic Kucrw l.iabilily I'lidcrwrilcrs (MAKUI) about 711 pei'cenl of Ihe premiums received from in.snreds is placed in a loss reserve fund. If Ihcsc funds are not utilized lo pay losses, Ilicy arc relumed to the insureds aflcr a peri- od of HI years. In Ihe lasl years, NKI.IA ami MAKl.t! have made premium refunds of more Iliau million. According In spokesmen for Ihe pools, (lie latest refund is "an expression of confidence in lire safely of unclear inslallalions." Since I he licwmiiiiK of ibeir opci'a- linn in 11157. neither pool has ever re ivived a claim arising from Hie opera- tion of a nuclear reactor. This safely record. Ihey mile, is wilhoiii parallel in olhcr industries. The Cedar Kaplds Gazette: Wed., .Sept. II, 1974 74 on indoor paint. sprng n your 4.99 INTERIOR FLAT Goes on easily. Dries fast. Easy clean-up. In 10 modern colors. INTERIOR LATEX FLAT 199 Reg. 8.99 25 great colors. 8.99 semi gloss. .5.99 DELUXE INTERIOR REG. 10.99 GALLON Guar. one-coat coverage. In 75 washable colors. Semi Gloss 7.99 OUTDOOR LATEX REG. 11.99 Q GALLON Guar. 1-coat silicone acrylic formula. Dries fast. 65 modern colors. ACRYLIC LATEX 15 _ GAL. Keg. 9.99 outdoor dries to a flat finish. In 15 colors. SAVE %-HP COMPRESSOR tank. 3.2 CFM at 40 PSI. Includes spray outfit. Reg. 209.95 SAVE 6' ALUMINUM STEPLADDER With ribbed REG. 14.99 steps, handy f f 99 tool tray. j[ J_ 22.99 better 6'.......ig.97 FOR SHOPPING CONVENIENCE, JUST SAY "CHARGE 219 2ND STREET S.E. PHONE 363-8111 Fixing op? Let us help. SHOP AT HOME: CALL WARDS FOR A FREE ESTIMATE ON INSTALLATION YOUR CHOICE SQUARE YARD REG. 8.99 BAY MEADOW Thick, lush shag with Du- Dacron polyester pile. REG. 6.99 ATLANTIS Multi-level loop carpet has nylon pile, jute back. REG. 8.99 TWISTETTE Nylon-pile mini-shag tak- dyed to give tweed effect. REG. 7.99 SHADOW BAY Multi-level loop nylon pile with foam backing. Tweeds. REG. 9.99 NYLPORT Colorful, rugged ny- lon pile with foam backing. NO MONTHLY PAYMENT TILL FEB. 1975. FINANCE CHARGES ARE APPLICABLE DURING THE DEFERRED PERIOD, Your New Home Is in The Want Ads The Employment Center Is In Classified
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