Nearly three in four (74%) of the 3,100 respondents in a survey by the American Institute of Certified Public Accountants (AICPA) said they did not think US companies could continue providing employees with pensions, according to an AICPA news release. More than half (54%) indicated that the erosion of these benefits would hurt recruiting and retention efforts.
A slightly higher number (57%) believe rising health care costs are the biggest barrier to a company’s ability to offer pension benefits; nearly a third (30%) said the pressures to compete in the marketplace outweighed the pressures to provide retirement benefits.
“These findings are a wake-up call,” said John Morrow, Vice President of the AICPA’s division for CPAs in business and industry, in the news release. “The traditional system of rewarding employees with pensions after long years of service is on its way out, because companies simply cannot bear the cost. Therefore, employees will have to find alternate methods of funding their retirement.”
Even though they see sufficiently covering pensions as unlikely, CPA executives believe reductions in pension benefits could threaten a company’s ability to attract and retain the talent they need to compete.
Of the respondents in the survey, 59.5% work for private companies, and 21.4% are employed in public corporations. The remaining respondents are in the not-for-profit and government arenas.
Virtually all the respondents said their companies offer some type of retirement benefit, with the majority offering a 401(k) plan with matching contributions (65.6%). Less than 5% said their companies offer no retirement plan.