Employers Contributing Less to Retiree Pension and Health Care Plans

By Staff Report

Oct. 22, 2009

The value of employer contributions to retiree pension and health care plans fell to 6.9 percent of employee pay from 7.8 percent from 2002 through 2008, according to an analysis of 183 employers by Watson Wyatt Worldwide.

According to the analysis, the value of total retirement benefits provided by the 79 companies in the study’s sample that offered a defined-benefit plan throughout the study period dipped to 8.6 percent of pay from 9.4 percent between 2002 and 2008, mostly because of significant cuts in post-retirement health benefits, according to Arlington, Virginia-based Watson Wyatt.

For the 43 companies in the sample that switched to defined-contribution plans from defined-benefit plans during the study period, the value of contributions to retirement plans dropped to 5.5 percent of pay in 2008 from 8.7 percent of pay in 2002, according to the analysis, which was released Wednesday, October 21.

For the 61 companies in the sample that offered only a defined-contribution plan during the period, the value of contributions rose to 5.6 percent of pay from 5.3 percent, the analysis showed.

The analysis is available at

Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail

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