FRAZIER'S REPLY

A great number of points in this letter misrepresent the real impact of the new life insurance and pension plan. To wit:

* "THESE CHANGES SIGNIFICANTLY IMPROVED PENSION AND INSURANCE BENEFITS". True for employees hired before 1971, and high-income executives hired after. But for the vast majority of future workers, the plan postpones accessibility of the benefits by up to 20 years.

* THE OLD PENSION PLAN PROVIDED BENEFITS FOR EMPLOYEES WITH "AT LEAST THREE YEARS OF SERVICE." In fact, completion of three years service used to ensure retroactive benefits to the day of hiring. The new plan lacks such a clause

* "ADMINISTRATION COSTS (WERE) EXTREMELY HIGH" UNDER THE OLD PLAN Under the old plan administration costs were absorbed in the individual policy. Under the new plan. Leonard Johnson, vice-president of the Coop, apparently spends a quarter of his highly paid time overseeing it--time which is billed not to the cost of the program but to other expenses.

* "EMPLOYEES WERE REQUIRED TO PAY INCOME TAX ON THE COST OF THAT INSURANCE." The annual tax in the vast majority of cases did not amount to even $4. Only those employees in tax brackets over 20 per cent paid a higher levy, up to a theoretical limit of $15.

* "THE NEW PENSION PLAN IS FUNDED WITH A GROUP ANNUITY CONTRACT..." Instead of resting on a solid base of individual life insurance contracts, employee pensions are now taken from a pooled investment fund. This, like any investment fund, is vulnerable to shifts in the stock market and economy.

* "NO PROVISION WAS MADE FOR EMPLOYEES WHO WERE DISABLED." The old plan specifically empowered the pension committee to make pension benefits available to an employee after becoming disabled. The new plan increases disability benefits nicely--but no one has ever become disabled on a Coop job in the memory of current and past Coop insurance administrators.

As a final note, The Crimson requested copies from the Coop of the current and former insurance and pension plans. General Manager Howard W. Davis denied both requests, saying that portions were liable to be "misconstrued." Davis has since told The Crimson "not to bother" Coop employees with further questions on the pension program or other matters. Mark C. Frazier