6
Secure Old Age
BY RALPH
American corporations were building
social plans a generation ago. Now mil
lions of workers are protected in re
tirement,
John L. Shields, 81, never made more
than $32.50 a- week in . bis? life. He
worked as a watchman in Frankfort,
Ky_. When he became old he had to
retire. He had a rented house for him
self and his wife, a tiny savings Uc-1
count, and little more.
A few years ago Johnny might have'
ended up on the poor farm. Yet right
now he is doing about as well as. in his
palmiest days. He doesn’t work a lick.
But every month he cashes checks
totaling $130, or almost precisely what-
he once drew in salary. Thè answer?
Johnny has a generous pension from
his old employers— Schenley Distillers:
The ghost of a needy old age I has
been laid for 2,000,000 A m e r i c a n
workers by the greatest corporate pen
sion rush in history, Before the war
only about 1000 corporations had pen
sion plans. Now 6000 such plans have
been filed for Treasury approval, with
more snowing down on Treasury desks
every day. Private industry may ulti-,
mately pay aged workers a billion dol
lars each year. Moreover, these annual
payments are guaranteed, either by in
surance company funds or irrevocable
trusts.
JLabor, once opposed to pensions as
a scheme to hold down wages, now
generally approves corporate programs
to supplement Social Security benefit^
The average Government payment to
bid couples ranges between $50 ' and
-$ 60 a month— admittedly inadequate to
provide more than bedrock essentials.
Additional contributions by employers
spell the difference between com fort
and misery.
Such enlightened social thinking has;
WALLACE
already drawn "fefriployer and employe
more closely together. I made a survey
of more than 100 representative Ameri
can corporations which have established
pension plans. Company after company
reported increased production and bet
ter worker morale. More than 80 com
panies reported lower labor turnover.
One executive told me his labor tu rn
over had been only half as; much I as
anticipated, simply because workers
knew they would be taken.xare of in
old age if they stuck with their jobs.
Almost equally significant, the land
slide of new pension plans has helped
stimulate an impressive boom in com
pany-sponsored life and h'ealth insur
ance programs— the other two key
stones pf workers’ social security. Group
health and accident plans now' protect
about 7,000,000 workers; 15,000,000
are covered by group life. In these pro
grams the company bears a’ third or
more of" the costs.
"The worker I makes American busi
ness click,” Langbourne Williams, presi
dent of Freeport Sulphur, told me.
"W hy shouldn’t he have business-spon
sored safeguards fo r his lffe, his health,
and his financial security in old age?”
One of the most liberal pension plans
was established several years ago by
Shell
Employes after 20 years’
service receive as a pension 40 percent
of their last five years’ average pay.
This means a $3000-a-year worker can
retire at $ 1200, a' year. Employees do
hot contribute a cent to this program.
Even more impressive, Shell has , a
’'Provident Fund”— a voluntary, plan
by which up to ten percent of an em
ploye’s salary can be deducted a n d
saved until he quits or retires, w ith the
, company matching the worker's con
tribution dollar for dollar. Just before
(Continued on page 24)