Word: pensionable
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Dates: during 1950-1959
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...biggest change of all is the flood of pension money going into the stock market. Up to 1950, few companies dared put more than 5% of their funds in common or preferred stocks, for fear that capital losses might imperil benefit payments. Today, many firms have as much as 50% of their pension fund in the market, and most of it in common stocks. Dr. Robert E. Wilson, chairman of the $2 billion Standard Oil Co. (Indiana), calls the pension funds "the strongest source of new capital going into the market." Where Stanolind once had 60% of its funds...
...newest and fastest-growing sources of new capital in the U.S. economy is the vast program of private pension funds. There are now 20,000 separate corporate plans covering in million workers, or 17% of the whole U.S. labor force. Their assets this year will reach $19 billion, and they are growing at the rate of $2 billion each year. By 1960, pension funds will have estimated assets of $35 billion and new contributions will be pouring in at the rate of $6 billion annually-30% of all savings available for new investment. For businessmen, the big problem...
...pension programs, some 13,000, mostly the smaller plans, are insured by life-insurance companies and still invest extensively in such traditionally conservative securities as Government bonds. But the remaining 7,000 programs, which have 60% of all the money, are handled privately either by company officials or bank trustees, and they are using their funds to serve both workers and industry. While in 1946 the funds invested up to 50% of their money in Government bonds, today the Treasury Department reports that the percentage has fallen...
With the great postwar building boom, pension trustees are beginning to lend money on big office buildings, shopping centers and housing developments. Other companies are turning to well-paying corporate bonds to provide an increasing flow of new money for industrial expansion. While few companies invest in their own stocks (some even have specific rules against it), Sears, Roebuck has put 60% of its $600 million fund into its own shares, much of the other 40% into mortgages on its 696 U.S. stores...
...Economist Sumner Slichter and others, is that the U.S. economy has become so complex-and strong-that the parts no longer necessarily move in the same direction all at once. In the future, different industries may have their individual ups and downs, but built-in props (e.g., pension plans, long-term management planning and investment, social security and an ever-increasing need for hospitals, highways and other public works) give the economy a cushion such as no nation has ever had before. Says Slichter: "The old-fashioned business cycle is being destroyed...