Mr. FELLERS. Yes.

Senator TAFT. As a matter of sound business judgment for all practical purposes in order to keep a complete freedom as to management decision it would have to fund the liability at the outset.

Mr. FELLERS. That is right.

Senator TAFT. The cost would still be 10 times in sound management thinking on this proposition, for the first year of the plan would still be ten times what the actual cost was.

Mr. FELLERS. That would have been their liability and I think that would have been increased each time there was a plan amendment. Senator TAFT. Thank you very much.

The CHAIRMAN. Thank you very much.

Mr. Murray Finkelstein is our next witness. Mr. Finkelstein?

Senator JAVITS. May the record show in connection with the testimony of the previous witness that one of the important aspects of the legislation before us is reinsurance, and that reinsurance is especially designed to "mutualize" the risk which is involved in plans which become unfunded for practical purposes by virtue of the exercise of the right of termination such as is here described.

This is a critically important point it seems to me in respect of the feasibility and cost of such plans under my bill S. 2.

The CHAIRMAN. Thank you.

Mr. Finkelstein, we appreciate your coming to us from New York.

STATEMENT OF MURRAY FINKELSTEIN OF REGO PARK, N.Y., MEMBER OF THE RETAIL SHOE EMPLOYEES' UNION, LOCAL 1268

Mr. FINKELSTEIN. Thank you.

Mr. Chairman, and Senator Javits, my name is Mr. Murray Finkelstein and I have been a member of my Union 1268 for 35 years. The CHAIRMAN. What union?

Mr. FINKELSTEIN. The Retail Shoe Salesmen's Union.

I have been a member for 35 years.

Well let's start at the time when our pension became in effect, which was the year-I think either 1950 or 1951.

The CHAIRMAN. Where were you working then?

Mr. FINKELSTEIN. I was employed in a store on 34th Street, New York City, Foot Rest Shoes. At that time I had 42 years of coverage before I got an opportunity to better my position.

So from there I went to Andrew Geller Shoes which was at the time located at 18 West 57th Street. They were at that time affiliated with the union pension plan. Now I did not at any time pay any money into the pension plan, but our fringe benefits were contractual.

Every 3 years when we used to settle our contracts, our fringe benefits would increase every time to an extent where at the time when this place of business closed, which was in a period of 15 years, which I have worked there, our fringe benefits were $14 a month, paid into the union.

At the time of closing, the entire outfit including their factories and stores and everything closed up. So I had to look for other employment.

Now I was approached by the union for other employment, but in the event that if I would take this type of a position I would have to

go back 25 years to the extent where actually I started into the business until I worked myself up to the position that I was in.

Now when I say in the position that I was in, in the 15 years of employment with Andrew Geller, which was a very high priced lady's shoe running up to anywhere from $30 to $150 a pair, I acquired a

clientele and customers would come in and ask for me.

Now this type of trade was not a salesman-customer trade. This was a company trade which we acquired which is actually a friendly type. This was very, very important to me.

Now when Andrew Geller closed up I was approached by the I. Miller firm. They had heard of us going out of business and heard of my reputation. I was approached and asked if I would accept a position with their firm which is exactly, I would say about 250 yards away from the Andrew Geller store that I was working.

Now the question was this. If I were to accept the I. Miller position I would have to give up my pension for the simple reason that the I. Miller firm which is owned by Genesco have their own pension. They in turn pay in for their employees and you have got to be employed there at least 15 years in order to get the same thing, I would say, as the union would offer me.

If I would accept the union job, it would be a question of taking a very large cut in salary, going back to the type of trade that wouldn't be beneficial to me because most of our business is done on commission and in the interim, while I was working for Andrew Geller I had a heart attack. That was 312 years ago, and I am feeling fine now.

So I had to take that into consideration for the simple reason that working for the I. Miller firm and taking my clientele with me, which they have done, I don't have to work hard, I can take care of myself, where I can wait on five or six customers a day and do my work and satisfy my employer.

I approached the union asking them that if in the event I would contribute $14 a month to their plan, whether they would accept it. They said no, it must come from the employer. I am going on 60 years of age. If I would stay on the I. Miller plan I would have to be 75 years of age in order to retire.

Now all this money that has been paid in for me actually if we didn't have a pension plan, this money would come into my pocket because these are fringe benefits which were negotiated under contract.

So as I said at the time when my place closed up, my employer was paying $14 a month for every man into the pension fund. Now my problem is this: I am very happy and satisfied where I am. Do I give up this position and go back 25 years after putting in 20 years on a pension plan without seeing anything for it? This thing has gone down the drain with no benefits.

The CHAIRMAN. Let me understand. You started under the plan when you went with Geller or was it prior to that?

Mr. FINKELSTEIN. Prior to that.

The CHAIRMAN. When you were at various shoe stores?

Mr. FINKELSTEIN. Only two prior to the Andrew Geller store.

The CHAIRMAN. You went with them in 1955. They terminated 1970, and went out of business; is that it?

Mr. FINKELSTEIN. Right.

The CHAIRMAN. You had 15 years with Geller and how many years prior to that under the plan?

Mr. FINKELSTEIN. 412 or 5 years.

The CHAIRMAN. This was a union administered plan and the employer paid into the plan?

Mr. FINKELSTEIN. The employer paid into the plan through fringe

benefits.

The CHAIRMAN. When you say fringe benefits, what does that mean to you?

Mr. FINKELSTEIN. Fringe benefits, things that we get while we are negotiating a contract. Now we had a pension fund and a health fund. Now this was paid in-we started, of course, very small and gradually, as moneys were coming into the fund, our benefits were increased, but I know as far as the pension fund was concerned there was $14 a month paid in for each man belonging to that particular type of pension.

The CHAIRMAN. For how long a period was this?

Mr. FINKELSTEIN. The $14 was for about 7 to 8 years. In fact, in the last negotiation, which was about 2 years before Andrew Geller closed, the pension fund got a $2 increase for every man.

The CHAIRMAN. Well, how did you look at that? You call that a fringe benefit?

Mr. FINKELSTEIN. Yes.

The CHAIRMAN. On the other side of the coin, how do you compare that with your wages? This was bargained for at the time your wages were bargained for?

Mr. FINKELSTEIN. Correct.

The CHAIRMAN. Now, if the fringe benefits were not in the bargaining process, what would that have meant?

Mr. FINKELSTEIN. It would have meant a larger increase.

The CHAIRMAN. A larger wage?

Mr. FINKELSTEIN. Right.

The CHAIRMAN. Does that mean you look at this in terms of really deferred wages?

Mr. FINKELSTEIN. That is right. That is cash money.

The CHAIRMAN. As cash money.

Mr. FINKELSTEIN. Correct.

The CHAIRMAN. When did you think that you would be able to get any cash money from that fringe benefit?

Mr. FINKELSTEIN. If Andrew Geller would not go out of business and if I worked until I am 65, I would have collected.

The CHAIRMAN. I see.

Mr. FINKELSTEIN. Now, I will be 60 this November and I don't have anything. The only type of income I have is at the age of 65 my social security and my wife's.

The CHAIRMAN. Did you know when you were contributing as a matter of your fringe benefits that you would have to stay there until 65?

Mr. FINKELSTEIN. No.

The CHAIRMAN. What did you think?

Mr. FINKELSTEIN. I could change my job. But the idea of changing my job. I would compare-I would say, to a Senator who all of a

sudden becomes nominated to become President, that is a pinnacle of the thing. This is the farthest you can go.

Well that is what happened to my position. This is the furthest I can go in my job. This is a good paying job. It has respect, and everybody in my field looks forward to this. When I was a boy, I would say of 25 or 26, I used to pass these stores and I used to say to myself if I could only work there. And well I reached that position.

Now to give that up and go back 25 years I would probably go back on a pension. But I couldn't give that up in the condition I am in. You see now I feel fine and wonderful, but to start it all over again where I would have to be working continually from the time I come in until the time I go home, I made a choice. Well, this was it. Then I read your article in one of the magazines and I wrote you a letter explaining the situation and that is all I can say to you. It is not much. The pension is only $75 a month but eventually, by the time I reach 65 this thing would be $100 a month. And when you are ready to retire every little bit counts I think.

The CHAIRMAN. Did you appreciate through those years that in order to collect anything under that pension you had to say in that particular plan until you were age 65?

Mr. FINKELSTEIN. Right.

The CHAIRMAN. You knew this?

Mr. FINKELSTEIN. Yes.

The CHAIRMAN. In other words, when Geller terminated, was your expectation that you could stay at the same quality job and still stay in the same plan? The problem here was you could stay in the same quality work with Miller.

Mr. FINKELSTEIN. Correct.

The CHAIRMAN. You had to switch plans and you lost those years under the other plan?

Mr. FINKELSTEIN. The reason for that is today, with the situation in that particular field-there are no other firms in that plan. And this I. Miller is still a union store. I still pay my dues every month, regardless, with no benefits whatsoever from the union. The only benefits I do get is from the firm. Hospitalization plan. Pension plan I cannot get. I will get it if I work there until I am 75 years old.

The CHAIRMAN. Is there a contribution being made monthly? Mr. FINKELSTEIN. As I said before I. Miller belongs to Genesco. How it works I do not know.

The CHAIRMAN. This is one of the gaps that we address ourselves to when changing jobs, all the credits that have been built up just evaporate.

Mr. FINKELSTEIN. Correct.

The CHAIRMAN. You have to start all over again.

Mr. FINKELSTEIN. Yes. If I was 10 years younger it would be fine. I would have no problem. But at this age of the game I have got a problem and that is it.

The CHAIRMAN. Well, because of the fine letter that you wrote to me we are able to understand your problem.

Mr. FINKELSTEIN. I appreciate this and believe me, I took the time off. I spoke to my manager and he says it is perfectly all right.

The CHAIRMAN. Well, you see you have helped us so much. From your personal experience you have described what we in our language

call the lack of portability of pension contributions, developing benefit rights, that submerge because you don't carry them next door on 57th Street.

Mr. FINKELSTEIN. And we don't have any vested rights whatsoever after 20 years. Everything goes down the drain.

The way this particular pension plan was written, they depend on people like us to fall out. They depend on people like us to die before we hit 65. This is what they claim so they can have money to pay the pensions.

The CHAIRMAN. Well, these are the forfeitures we talked about earlier, and we will be talking more about them and about studies that we made. The conclusions from the information we receive tell us exactly the same story.

Mr. FINKELSTEIN. You know, it would be a wonderful thing if something would come out of this retroactive to people like us where we could still get the benefit out of this thing. It is very well for the future, you know, but it is very important for people like us.

The CHAIRMAN. Well, thank you very much. You have been most cooperative.

Mr. FINKELSTEIN. I appreciate it very much.

The CHAIRMAN. Thank you. When I am feeling very plush one day maybe I will pay your store a visit.

Mr. FINKELSTEIN. That is right. They run up to $200.

The CHAIRMAN. That is why I said when I am feeling very plush. I think we at this point will also include in the record the exchange of correspondence with the Retail Shoe Employees Union.

(The information referred to follows:)

Senator HARRISON A. WILLIAMS,

Chairman, Senate Labor Relations Subcommittee,
Washington, D.C.

SEPTEMBER 28, 1970.

DEAR SENATOR WILLIAMS: I enclose a photocopy of a recent article which was brought to my attention, and which encouraged me to address myself to you in the hope that you will continue to pursue the problem of non-transferable pension funds. Perhaps my story will aid in your endeavors:

I am a 35-year member of Retail Shoe Salesmen Employe's Union, Local No. 1268 (Union Square, N.Y.C.). In 1950, I started employment at Foot Rest Shoes, 34th Street, N.Y.C., and remained there for 41⁄2 years until the store went out of business. The contract then in existence between employer and union provided, among other things, for a pension fund-paid in by the employer and administered by the above union.

My next job was with Andrew Geller Shoes, 57th Street, N.Y.C., who are manufacturers and retailers of ladies' shoes. I was employed there for 15 years until the retail shop closed this summer. The final blow came when I was informed by my union that my pension funds (191⁄2 years' worth) were non-transferable unless I found employment in another shoe shop that had the same contractual arrangement with the union. This was almost impossible to accomplish in the weeks gone by, in view of economic conditions in general. In order to avoid any further loss of income, I was forced to take a job with the I. Miller Shoe Shop in Manhattan, N.Y.C. Unfortunately, their pension plan with my union was of a different type: under their conditions, I would have to begin all over again and work for 15 years before being eligible for retirement funds. Thus, at age 58 I had to look forward to staying employed until age 73-before I would be granted the security toward which I had been laboring for 35 years!

The union cannot (or will not) help. They say: rules are rules. I ask: what has happened to all those funds paid-in by my two former employers? Why aren't they transferable, since it involves the same union? Even partial payment would help somewhat. What legal recourse now lies open to me in order to secure my old age? It is very discouraging, to say the least.