Final answer:
Pension insurance is a pay type making up a small part of total compensation and may not be utilized by some employers. It is paid to the Pension Benefit Guarantee Corporation to protect employees' pension benefits. This differs from the larger components of compensation such as wages and health benefits.
Step-by-step explanation:
The pay type that usually makes up a small proportion of total compensation and may not be used at all by some employers is pension insurance. Employers that provide pensions are legally required to pay into the Pension Benefit Guarantee Corporation to ensure that their employees receive at least some pension benefits if the company becomes unable to fulfill its promised pension obligations. However, not all employers offer pension plans and thus may not contribute to this form of insurance.
Other forms of compensation that make up a more substantial part of the compensation package include wages, health benefits, vacation pay, and legally required payments such as Social Security, unemployment, and worker's compensation insurance. Some of these, like worker's compensation insurance, are paid by employers to funds that support workers if they are injured on the job, but still tend to represent a smaller fraction compared to wages and health benefits. The total compensation mix can be influenced by various factors such as education, skill, and labor union membership.