Private Pension as a Percentage of Final Year's Pay ⋆

Private Pension plus Primary Social Security
as a Percentage of Final Year's Pay *

Based on a sample of 540 plan participants who retired
in 1977 from 23 different companies.

Less than 5 retired employees

Private Pension plus Primary and Spouse's Social Security as a Percentage of Final Year's Pay

Final Pay Class

*

Based on a sample of 435 married plan participants who
retired in 1977 from 23 different companies.

TABLE C

PLAN BENEFIT

FINAL AVERAGE

PAY LEVELS 9,000 12,000 15,000 18,000 21,000 24,000 27,000 30,000 33,000

TABLE D

Some Alternatives To Comply with Administration Proposal
Employer Objective: Achieve approximately 55%
earnings replacement for single retirees

Present Plan: 2.0% FAE**/ per year of service (30 yrs.)
less 83-1/3% of Primary Insurance Ammount (PIA)
(current maximum offset).

$40,000 $100,000

Alternative #1: Offset reduced to 1:1 ratio

2.0% FEA less 2.0% PIA per year of service (30 yrs.)

Alternative #2: Benefit and offset rate reduced, 1:1 ratio 1.4% FEA less 1.4% PIA per year of service (30 yrs.)

Alternative #3: Benefit and offset reduced, 1:1 ratio
1.1% FEA less 1.1% PIA per year of service (30 yrs.)

*/ Assumes employees retire at age 65 in 1978 with 30 years of service with employer (30 rather than 35 years of service is used since many employers provide supplements for service over 30 years).

**/ Final Average Pay (FAE) assumed to be average over last 5 years; earnings are assumed to increase at 6% per

year.

The Securities Industry Association ("SIA")

has the honor to offer its general observations and legislative recommendations respecting the Employee Retirement Income Security Act of 1974 ("ERISA").

SIA represents over 500 leading securities

firms headquartered throughout the United States
and Canada which account for approximately 90 percent
of the securities business conducted in this country.
A great many of these firms provide ERISA-covered
pension plans with a variety of services, including the
underwriting and distribution of corporate and public
securities, dealings in such securities, brokerage, invest-
ment advice, discretionary money management and

WASHINGTON OFFICE 490 L'Enfant Plaza East. S W Washington, DC 20024 (202) 488-4664