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089659 1 (1975-09-19)

handle is hein.gao/gaobactvd0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE ROOM 1903 JOHN F. KENNEDY FEDERAL BUILDING GOVERNMENT CENTER BOSTON, MASSACHUSETTS 02203 September 19, 1975 Lt. Commander Gary Williams, USN Chief, Contract Administrative Division Defense Contract Administration Services Office Raytheon Company, Spencer Laboratory Wayside Avenue Burlington, Massachusetts 01803 Dear Commander Williams: The General Accounting Office recently completed its review of pension costs allocated to Government contracts at nine contractors from various sections of the United States. The review was made to determine the reasonableness and allocability of pension costs for a recent three-year period. Raytheon Company, Lexington, Massachusetts, was one of the contractors reviewed, During the course of this review, we presented Raytheon officials with the tentative results. We have now completed our work and are reporting our findings and conclusions for your consideration. BACKGROUND Raytheon's pension plans provide coverage for both salaried and hourly employees. Significant features of each plan follow. The salaried plan is contributory, members must be 30 years of age with one year of continuous service or 40 years of age to participate, and 50 percent vesting is obtained after 10 years of continuous service with an additional five percent each succeeding year. Annual benefits are computed based on 60 percent of the member's contributions after 1969, plus a lesser percent for prior years. The basic hourly plan is non-contributory, membership is obtained upon employment regardless of age; 50 percent vesting is assured after 10 years of credited service with an additional five percent each suc- ceeding year. Monthly benefits are $6.00 for each year of service after 1972 and somewhat less for prior years. Neither plan provides survivor benefits if a member dies before retirement and neither plan has portability.

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