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20 Ggfesbur Q Regisfer-Ma i 1 / Go lesbu rg^ 111. Wednesday, June 20 / 1973 Media Residents Graduated From College at Canton MEDIA — Darrcll Gene Mow en and Robert William Kane have been graduated from Spoon ifrvef Junior College, Canton. .Attending commencement ex- efcises were Mr. and Mrs. Robert Mowen, Mr. and Mrs. John W. Kane, Dan Mowen, Art, John and Dan Kane and Mrs. Cal Dlliard and Kelly and Lori. A guest June 16 at the home of Mr. and Mrs. Perry Heap Was Mrs. Gene Sullivan, Fallon, Nev. Rev. Richard Gibson is attending the summer session at the University of Colorado, Greeley. His address is 603 S. Lincoln St., Loveland, Colo. Arden Wheeler has been hired as music instruotor at Southern High School, starting in the fall. He will move into ithe house recently vacated by Danny Wilmoth, former music instructor at the school. I Pension Promises: Can Security Be Improved? By GERARD M. BRANNON WASHINGTON (NEA) About $12 foiHion a year is put aside by employers an pension plans and this involves a current tax benefit of iteaiiy $4 Second in a Series billion. One of the arguments over these plans is about thei security of the pension promises that the plans hold out. CAN PENSION PROMISES BE MADE MORE SECURE? Congress has been primarily interested in this question of whether workers covered by pension plans really get benefits at retirement. In 1971, Sen. Harrison A. Williams Jr. (D-N. J.) and Jacob Javits (R-N. Y.) respectively, the chairman and ranking minority member of tlhe Senate Committee on Labor and Public Welfare, released the results of a survey which showed that in a sample covering seven million pension plan participants since 1950, only 4 per cent have received any kind of pension benefit. That committee has approved a bill which would increase pension security, but it is hung up in a jurisdictional squabble with the Finance Committee, which began hearings into pension matters May 21. Rep. John H. Dent (D- Pa.), chairman of the subcommittee on labor of the House Education and Labor Committee, has »Tso sponsored pension legislation. Finally, the Nixon administration on April 11 sent pension proposals to Congress. The congressional b i 11 si would do something about vesting, funding and reinsurance but the administration! mm plan does not deal with reinsurance. WHAT DOES A VESTING REQUIREMENT DO? Vesting occurs when an employe gets an assured claim on the pension fund. Sometimes the plan says that the employe gets no such right unless he stays with the same employer until he is 65. In other plans he begins to get this assurance when ha has worked for the same employer for 10 years or until he is 55 or some similar test; For example, the bill that the Senate Labor and Public Welfare Committee approved requires vesting of 30 per cent of the pension claim after eight years of work under the plan, increasing by 10 per cent a year thereafter. This "requirement" provides various escape hatches, so many that Prof. Mertoni Bernstein of Ohio State University, an authority in the field, thinks that it wouldn't change the present situation very much. WHAT DOES A FUNDING REQUIREMENT DO? The biggest boost to employer pension plans occurred during World War II (when pension plans were a way around wage controls). In those days, when the present pension provisions in the tax law Were written, the problems that the Congress imagined was that companies would do a lot of advance funding of pension plans to get the deduction against the excess profits tax. The law provided, therefore, a ceiling on the funds ihat could be put in one year.. There is very little in the way of minimum funding requirements. A plan can be set up and promise employe benefits with respect to prior years, but it doesn't have to put cash aside for these promises. In one famous case, when Studebaker moved to Canada, thousands of employes found that there was no money to pay their pensions. The thrust of congressional and administration proposals is to require at least a minimum *amount of funding if the plan is to qualify for tax benefits. WHAT IS REINSURANCE? In our business world it is hard to say that any one firm will survive to provide retirement benefits to its em ployes. We can predict that some firms will survive. Tills has Jed to devising ways to provide for some sort of insurance premium that would be paid by all plans which would provide a fund from which money could bo paid in cover pension commitments of firms that go broke. (NEXT: Who Gels In?) 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