Vast majority of employers provide retiree benefits

HR Magazine, Nov, 1998 by Bill Leonard

Employers are placing a lot of emphasis on retirement benefits and are increasing their efforts to help employees save for their retirement years, according to a recent report released by the compensation and benefits practice of KPMG Inc.

The KPMG report, Benefits in the 1990s: 1998 Retirement Survey Data, found that 95 percent of the responding employers provide retirement benefits to their workers. Financial and investment education is another popular benefit that employers provide. According to the survey, 62 percent of the respondents offer education on saving for retirement - a sharp increase from 1995, when only 46 percent of the employers provided some form of financial education. The survey also found that 60 percent of the respondents plan to increase financial education opportunities in their workplace.

The survey did uncover one downside to the employers' attitude on retirement benefits. According to the report, a slight majority (54 percent) of employers had no plans to increase retirement benefits if Congress decides to cut Social Security benefits to maintain solvency of the federal program. In the 1997 survey, slightly less than 50 percent of the employers were unwilling to increase retirement benefits to offset reductions in Social Security benefits. This year's survey reported that 18 percent of the respondents said that they would raise benefits, while 29 percent of the employers stated they were undecided.

"This is a startling message to policy makers that they should not expect employers to help retirees make up the loss of retirement income," says Martha Priddy Patterson, KPMG's director of employee benefits and policy analysis. "I do believe lawmakers haven't given enough thought to how changes in Social Security will affect retirement benefits."

While many employers do oppose supplementing reductions to Social Security benefits, the KPMG study revealed that 86 percent of the respondents believe that employees need the traditional three-legged stool for a secure retirement: employer-provided benefits, personal savings and Social Security.

For more information or a copy of the study, visit the KPMG Compensation and Benefits Practice home page at http://www.us.kpmg.com or call (201) 307-7814.

Bill Leonard is senior writer for HRMagazine.