The analysis found that, from 1998 to 2008, the value of total retirement benefits provided to new, salaried employees in the eight industries studied declined by 19%, from 7.88% to 6.36% of pay. Total retirement benefits include DB and DC plans, retiree medical and retiree life insurance plans, according to a press release.
The overall decline in total retirement benefits was mostly due to a 53% drop in the value of defined benefits, from 4.19% of pay in 1998 to 1.99% in 2008. DC benefits increased by 38%, from 2.89% of pay in 1998 to 3.99% in 2008.
According to the analysis, the largest decline in total retirement benefits from 1998 to 2008 occurred in the retail and wholesale industry – a drop of 33%, from 5.72% of pay to 3.82%. Among the eight industries analyzed, only service industry workers saw the value of their retirement benefits increase — from 4.16% of pay to 4.30% of pay, an increase of 3%.
The largest drop in the value of DB benefits from 1998 to 2008 occurred in the retail industry (81%), which, along with the service industries, also provided the lowest level of defined benefits at the end of the period. The value of DC benefits increased for all of the industries analyzed, led by the pharmaceuticals and health care industries, which experienced increases of 97% and 87%, respectively.
The Towers Watson Employer Commitment to Retirement analysis is based on retirement benefit data from an average of 642 companies in eight major industry categories.More information is at http://www.towerswatson.com.