Benefits September 25, 2009

Benefits Budgets Took a Hit in 2008

September 25, 2009 (PLANSPONSOR.com) - Fewer than half of plan sponsors say their benefits budgets increased this year over 2008, down from the two-thirds of those polled about their 2007 and 2006 spending, a new Prudential Financial poll has found.
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A Prudential news release said about one-third of companies are maintaining their 2008 budget levels, while another 15% say their budgets have decreased by an average of 16% over last year.

“Employee benefits are especially crucial in uncertain times,” saidLori High, president of Prudential’s Group Insurance business, in the news release.“Plan sponsors need to make the most of both the company’s and the employee’s premium dollars to ensure the benefits can be maintained.”

Additional trends include:

  • Companies hurt by the economy are altering their expectations regarding benefits staffing levels. Those affected most by the recession are forecasting a downsizing of their benefits staff over the next five years .
  • Cost-cutting measures are impacting strategic initiatives such as improving employee education and advice.
  • Using Internet technology to increase efficiency and control benefits costs will be important objectives by 2014.

“The good news is thata majority of plan sponsors and brokers have a positive outlook for 2010,” High said. “Both plan sponsors and brokers expect their companies to be doing better financially a year from now.”

The study was fielded via the Internet during April and May 2009 and consists of three surveys: one among benefits plan sponsors, one among benefits plan participants, and one among employee benefits brokers and consultants. The surveys were conducted for Prudential by the Center for Strategy Research, Inc., a Boston-based, independent, market research firm.

More information is available here .

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