Companies are finding it more difficult to provide health benefits for retirees in the struggling economy. The Benefits USA survey reports that 21.9 percent of companies provide retirees with the option of obtaining health coverage, which is slightly lower than the 22.9 percent reported in 2006. In order for retirees to be eligible for health benefits, they are required to work an average of twelve years for their employer.
Amy Kaminski, director of marketing for Compdata Surveys, states, “Employers in the public sector and in other heavily unionized industries, such as utilities, have been feeling the financial pinch created by mandated retiree benefits for some time now. Individuals should have a plan in place and not rely solely on their employers to provide health benefits upon retirement. Escalating medical coverage costs, combined with a rapidly increasing retiree population and longer life expectancies may make it difficult for companies to sustain these benefits indefinitely.”
Not every industry offers retiree health benefits. Utility companies offer a higher percentage, as 69.1 percent offer them. Not-for-profit and banking and finance organizations offer benefits at 37.6 percent and 31.5 percent, respectively. Healthcare companies offer benefits at 15.8 percent and hospitality at 3.3 percent.
The United States Postal Service has been struggling financially and has reported that it will have to shut down some facilities and eliminate jobs. Many report that one reason the USPS is struggling is because of a legislative requirement mandating retiree health benefits to be pre-funded for employees.
One example of this is the United States Postal Service. The USPS has made headlines over the past year as economic woes have forced it to announce plans to close facilities, change delivery schedules and eliminate jobs. Many have noted that a large part of the trouble USPS is facing is due to a legislative requirement, mandating retiree health benefits be pre-funded for employees.
If you would like to learn more about the survey or Compdata Surveys, visit http://www.compdatasurveys.com/benefits-usa/.