SPRINGFIELD, Mass., April 8, 1971. DEAR SENATOR WILLIAMS: Hurrah for you and your investigation of pension plans.

My case is one in point. Female employed 10/1/23, left because of pregnancy 1/23/47-returned to work with [the same company] on part time or occasional basis the same year. 10/47-unable to get full time employment because of hearing loss. This loss could be traced to employment *** This was over a period of eight years, after which I was employed, having received a promotion to the business office. I worked about seven years on occasional basis and 23 years full time, and received no pension.

This company has put billions of dollars in their pension fund. There must be hundreds of people like myself who are now 65 years old and receive no pension *

MADISON, WIs., April 9, 1971.

DEAR SENATOR WILLIAMS: I note that your Labor Subcommittee has been investigating private pension plans, and as a former participant in one I pass the following information on for your use. It serves as a good example and adds more fuel to the fire.

I am a chemical engineer and in September, 1946 I went to work in a management position at one of the plants. It has a private, non-contributory pension plan. After a number of transfers I was terminated by them due to a change in top management in July 1960. My length of service was 13 years, 10 months. The result was no vested rights. At that time I was 45 years old. In July 1966 I again went to work for at another facility near here with

a promise that my rights would be vested, and again due to a change in management I was terminated in June 1970. My age was 55. My length of service was four years. The result again was no vested rights.

In summary, I have spent 17 years and 10 months of total service with and am almost 56 years old. And yet, I have nothing in the form of retirement income *

NEW ORLEANS, LA., April 13, 1971.

DEAR SENATOR WILLIAMS: We read, with great interest, this article in our local newspaper concerning your survey of company pension rights. We too were shocked to realize that what happened to my husband wasn't an isolated case but a common practice ***

For my husband is one of those men forced to resign from

after 28 years

of service without a pension. Also the life insurance and health plan we paid into for 28 years wiped out. In fact, everything was so neatly wiped out, it was as though we had never even been associated with

When he realized he wasn't to get a pension and they dangled the termination pay before him, of course we took it. Something was better than nothing. Now we know this is just what the company counted on so they could waive all his rights to a pension.

Under such emotional stress who thinks! Oh yes, it was skillfully manipulated and with purpose to avoid giving him a pension. Think of the money they saved! And the timing was beautiful! Had he completed 30 years he would have gotten a pension. So this was carefully done at 28 years

***

ALLENTOWN, PA., April 21, 1971. DEAR SENATOR WILLIAMS: Upon reading an article in the Allentown Morning Call April 1, 1971, concerning pensions, I am sure that I have a legitimate reason for writing to you. I started to work for Dairy on April 1, 1940, when I was 23 years old. I started as a groundsman, watchman, Janitor and engineer, receiving $65.00 per month and working 60 or 70 hours per week. Although this pay was not anything to talk about, I had a steady job with promises of steady work as long as I wanted it. Over the years *** I grew to better positions until in 1962 I was promoted to Maintenance Manager *** Now to get to my complaint-After working for - Dairy for 30 years and 10 months I was finally told on January 1, 1971 that my classification was being eliminated and as of this date I was no longer working for Dairy. You can imagine what this does to a person at 55 years of age. I not only lost my job but also lost my retirement pension, which I worked 31 years for *

COLUMBUS, OHIO, April 22, 1971. DEAR SENATOR WILLIAMS: A recent news release by AP made known that the Senate Labor Committee will seek to remedy conditions disclosed in a study of private pension plans which do not vest to the employee until after an unreasonable period of time and in some extreme cases do not vest at all until the employee has reached age 65 regardless of the number of years of service to the employer...

I am now employed by and have been since November, 1935, a period of thirty-five years. My company has a so-called "Non-contributory" pension plan, qualified under the Internal Revenue laws, which has no vesting whatsoever until an employee reaches sixty-five years of age.

DEAR SIR:

KENOSHA, Wis., April 23, 1971.

I wish something could be done for people who have been cheated out of their pensions. My husband worked for 25 years at the same iron ore mine in Ironwood, Michigan and has no pension rights. He was employed by there for 18 years, but that was from 1936-1954 and before they had vested pensions. When gave up the property in 1954, they did not offer the men jobs elsewhere. The men received no advice from the union or anyone else and were required to accept their severance pay in order to be hired by the new operators, the Co. This company operated the mine for 7 years and then was forced to abandon it due to competition from foreign ore. This time, with few jobs in the area, we were forced to leave our home and my husband started all over again at the age of 49 at He has been employed there for almost 8 years but has only 5%1⁄2 years of pension rights because he has been laid off so much due to lack of seniority. A couple of years ago, I wrote to the Union to ask them to try to do something for the miners who lost all rights to their pensions. I never received an answer ***

THE BRONX, N.Y., April 27, 1971.

DEAR SENATOR WILLIAMS: After having been employed by for more than 29 years, I have been notified that my employment is being terminated. At the time this notification was given to me, my superiors stressed that my work was entirely satisfactory and that I should not feel that the action was a reflection of my performance. In fact, throughout the entire period of my employment which began on March 23, 1942 all of my superiors have, without exception, rated my work performance entirely satisfactory, and in most cases, as outstanding.

Needless to say, the termination comes as a jolt. My employment with covers "years of plenty" when other employment opportunities as well as education opportunities were readily available, and when job offers were declined in favor of continued employment with One of the major influencing factors in reaching the decision to remain with in each instance was the pension which would eventually be available to me *** It seems significant that my employer has elected to terminate my employment after these many years of service and only two years before I become eligible to receive the pension

PORTLAND, OREG., May 3, 1971.

DEAR SIR:

My wife and I heartily agree that private industry in many instances is unfair to workers on their retirement pension plan. My wife worked for

from October 1947 through July of 1966, when because of the working conditions she resigned from her job at the district office in Portland, Oregon.

At the time she resigned, the pension plan was set up on a 25 year basis. Six months after she resigned, they reduced their retirement pension plan to only 20 years.

When my wife resigned there was no mention that retirement would be reduced to 20 years. If she knew this, my wife would have worked 20 years and drawn the pension. It is true that contributed all the money for their pension *** However, it is unfair that 18 years and 9 months go down the drain, and they do not pro rate the pension.

Respectfully yours,

now

ADRIAN, MICH., June 1, 1971. DEAR SIR: I'm writing to ask you if your investigation would cover this point. As you well know, some companies were very slow in starting pension plans of any kind. This was the case of my husband's company, due to a merger. He worked for this company from the day it was begun in 1934 (29 years when he retired). He only received his pension 11⁄2 years. It was cut off immediately when he died in 1966. I don't think this is fair for he wanted that security as much for me as for himself. They make no concession of any kind and not even a part of it to the widow. I wouldn't expect it if I remarried but I haven't and I certainly could use it * * *

SAUGUS, MASS.

DEAR SIR: Business Week recently carried an article stating that your Labor and Public Welfare Committee was going to consider pension legislation. This would probably improve pensions in a company which has not been greatly influenced by labor unions. This is a huge company and very abundantly financed.

Pensions here run roughly one half of what the

Workers recently gained.

It takes about 40 years of service to obtain any kind of pension here. In my case, I worked for from 1925 to 1941, and 1947 to the present with about a year to retirement. My pension service is only from 1947. If these two periods were joined I could obtain some $350 to $400 per month as against $250.

However,

started vesting in the 1950's but prior to that no service credits

on broken service. How can they be so whimsical on this?

My case is not unique. I have many friends with the same service trouble, just hoping for a change of rules.

The CHAIRMAN: Senator Javits?

STATEMENT OF HON. JACOB K. JAVITS, A U.S. SENATOR FROM THE STATE OF NEW YORK

Senator JAVITS. Thank you very much, Mr. Chairman. I'd like to say in return that no one could have given greater response and more complete response to the efforts to determine what we should do than our chairman. I'm very grateful to him and hope that our collaboration will produce laws which will affect and help 30 million Americans who are concerned in private pensions also, Mr. Chairman.

And my statement will be brief. My own bill in this field is the Pension and Employee Benefit Act S. 2, which I wish to make clear, is the very gifted work of Frank Cummings, my administrative assistant, and Gene Mittelman, who is minority counsel of this subcommittee. And now is added, Mike Gordon who worked with Mr. Noto on this inquiry.

Let me say that my whole purpose, Mr. Chairman, is to fortify and develop a private pension plan system which will give the American worker a new sense of confidence and a new sense of participation in our private sector of economy. It is not in any way to disparage the private pension system. I believe in it deeply and I want to build it up so it really represents a considerable portion of every worker's retirement security. So that he really feels it is this, plus social security, which will give him every assurance of comfort and dignity in his older years.

Mr. Chairman, our investigation and my own work has demonstrated that the average pension plan and I emphasize the word "average"-does not deliver a pension to the average employee who works under it.

66-500 O-71-pt. 1-2

That's the "system." The trouble with the private pension system is not "bad people" but rather bad structure-and the absence of law. It would be comforting, in a way, to find that the widespread disappointments in the pension field are simply the products of fraud, theft and criminal activity, because then all we have to do to solve the problem is "catch the thieves"-not provide for a system which would really deliver on the sound and highly desirable pension plan idea.

Not that there are no thieves in the pension business-we all know there are some, though I think they are very few.

But what we really have here is a set of plan structures and eligibility requirements which have become customary and accepted-even by the most sincere employers and by some unions-but which all too often have no relation to the realities of an employee's actual working life.

We're here today to hear evidence.

For example, a man works 2612 years as an actual case-for one employer, but becomes disabled at age 46. He forfeits all pension credits because his plan doesn't provide for any vesting under age 50. That's "the system."

Another man works for several decades under a plan which vests at age 55. But when he's 50 years old, after three decades under the plan, his union supplants the company plan with a new union plan. He is too ill to work long enough to qualify under the new plan, and yet too young to vest under the old one. So he gets nothing. That's "the system."

Such cases are legion.

And the general conclusion is: Under this system some employees get a pension, but most get nothing, and many forfeit after 10, 20, 30, and even 40 years of service.

Four years ago, I first introduced a bill to set minimum Federal standards for all private pension plans: Minimum eligibility standards "vesting"-minimum requirements for funding and solvency, Federal reinsurance in case of untimely termination of the plan, a voluntary Federal clearinghouse for portable pension credits, fiduciary standards of conduct eliminating conflicts of interest for pension administrators, and a new Federal Pension Commission to administer all these requirements, as well as existing laws now handled by the Labor Department, the Treasury, and other widely scattered departments and agencies, all of which would come under the proposed new Pension Commission.

S. 2, that bill, is still pending in the committee.

The evidence has continued to mount and the results of the fine investigation undertaken by our chairman, which the Senate has properly financed, the questionnaire sent out by the committee a year ago at my suggestion, and the evidence at these and previous hearings already held in the other House, all point to the urgent need for legislation and the desirability of a true private pension system. It's my judgment that every defect in the system revealed by our investigation and the previous hearings would be corrected by S. 2. Every employee witness who got nothing under "the system" would have had a pension if the system were corrected as provided in my bill.

We're not here to create a record as an academic exercise. The problems are too real, the human tragedy is profound and the losses, which continue every day, are tragic.

We're here to document the facts, pinpoint the weaknesses in the system, and correct them.

And there's no reason why we cannot do this, carefully, intelligently, and thoroughly, and with deliberate speed before the end of the 92d Congress.

Mr. Chairman, I ask unanimous consent to insert in the record a copy of S. 2 together with an explanation of it, and a copy of my testimony before the Labor Subcommittee of the House of Representatives, together with certain appendixes to that testimony.

The CHAIRMAN. Certainly. Thank you, Senator Javits. (The material referred to follows: