Recession Has Taken Toll on Employee Retirement and Benefits

More than half (52%) of respondents to a Towers Watson survey said the percentage of their employees working past their desired retirement age is higher than it was before the financial crisis.

Nearly one-third (31%) said they expect that percentage will be even higher next year, according to a press release.

In addition, 30% of companies reported employees have on average reduced their contributions to 401(k) plans from pre-financial crisis levels, and 51% have seen an increase in employees’ hardship withdrawals from pre-financial crisis levels. Almost half (48%) of U.S. respondents said employees had shifted 401(k) plan allocations out of equities; however, 37% expect employees to shift back toward equities a year from now, the survey found.

Thirty-two percent of companies reported that their employees’ cost of health care coverage is higher now than it was before the financial crisis, and 38% indicated they think it will be even higher a year from now.

While 28% of employers expect that, a year from now, they will put more emphasis on ensuring benefits provide a desired level of security for employees, the survey found much larger numbers of respondents expect to increase their focus on controlling and reducing benefit costs (53%) and managing the risk and volatility of those costs (49%).

The survey, based on responses from 118 mostly large employers in the United States and 459 employers globally, was conducted in early January.

The survey report is available here.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

«