Employers considering voluntary benefits Tough Economy; Cut

 

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9 February 2009

BENEFITS MANAGEMENT; Pg 9

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Employers considering optional difficult economy; Cut Deeper

LOUISE ESOL



Although the layoff of workers and the wage freeze is one way that companies face a difficult economy to try to control costs, they are a voluntary assessment of the benefits they provide, experts say.

Experts say that employers spend more time examining voluntary benefits, such as retirement health care and long-term disability, possibly a transfer of benefits paid or voluntary optional global base. Meanwhile, some employees are voluntary offers to keep more money in their paychecks, they say.

`` This is a subject of our customers are in the air now,''said Lale Iskarpatyoti, a Philadelphia-based health care practice leader for Watson Wyatt Worldwide. `` Everyone, employers and employees, is focused on keeping costs down.''

`` It is clear that all our customers have to say their priorities have changed,''said James Blaney, New York-based chief growth officer of Willis Group Holdings Ltd. 's North American Benefit practices. `` There's less disposable income for all, employers are cutting benefits and offers back.''

Ray Brusca, vp-Benefit Towson, Maryland-based Black & Decker Corp., said the word on the street is that many companies are turning basic benefits of volunteering, a base budget of the development tools electrical and accessories maker is not likely to follow.

`` We were told (by experts) as an employer in these times, we need to provide more (optional),''said Brusca. `` Some people suggested as a way for employers to eliminate or reduce ERISA type and offer their services on a voluntary basis. This is just not us.''

Given that the economy has plunged deeper into recession during the fourth quarter of 2008, research on the effects on company-paid benefits and has been deliberately limited.

In December, Watson Wyatt has updated its effect from the economic crisis on human resources programs survey of 117 U.S. companies. In addition to layoffs, hiring and wage freeze and reductions based on merit incentives, 10% of companies plan to eliminate or reduce their pension contributions.

Early last year, New York-based MetLife Inc. released its sixth annual survey of trends in employee benefits benefits 1652 decision, finding that 55% of companies offered voluntary benefits and saw them as ways to retain employees and keep costs down employer.

Late last month, based in Chicago, and outplacement consulting firm Challenger, Gray & Christmas Inc. found that 91.8% of 100 senior human resource executives said their companies have cut costs to cope with economic pressures, including voluntary benefits (see chart).

Cost reduction seems to be the driving force of change in voluntary benefits, experts say.

Bruce Sletten, Fort Worth, Texas-based vp of Aon Consulting Worldwide Inc s elective benefits practice, told voluntary benefits are slowly becoming a pillar of the employers of benefits, leaving employees to pay more.

But especially in the doldrums more sectors of manufacturing and retail, "said Sletten employees are slow to adopt the voluntary plans.

Watson Wyatt said Iskarpatyoti enrollment in voluntary programs, such plans and retirement programs, are at the bottom of all time that employers are beginning to offer scaled back versions of programs for basic health care, such as plans focus on the consumer, who usually take a bigger bite to employees checks.

`` (Employees) have to first find the money to pay their health care and continue to contribute to retirement,''she said. `` These are optional and voluntary benefits are less likely than a place (where) the employees spend their money.''

In return, employers are little used in voluntary benefits, such as those who provide legal advice and some forms of disability, and the cup of their advantages, experts say.

Although employers usually do not contribute to voluntary benefits, there are administrative costs, Ms. Iskarpatyoti said.

`` Employers are taking a look at their menu offerings, and they do not see the participation, they are cut (optional),''she said.

Finally, employers may have difficulty in meeting the minimum conditions for participation, thus forcing them to end some benefits, even voluntarily, if an employer wants to keep them, "said Sletten.

The question remains: employees, many now pay more for basic services and, possibly, see the company reduced the offer, complaining? Not really, Mr. Blaney said Willis.

`` Many employers are predators that, as employees have a job, nobody will complain as long as they still collect a salary,''said Blaney. `` Let's face it. Workers have heard a lot about downsizing. We hear it every day. Broadly speaking, anxiety in the relations between employers and their employees.''

Meanwhile, the trend could mean that the opportunity for insurers and new products for the protection of wages emerges, experts say.

`` There was some noise on the market with respect to (wage protection coverage),''said Aon Sletten. `` There are serious research carried out there.''

Coverage of wage protection, offered on a voluntary basis through work or through individual plans, plans mirror could be introduced by the credit card companies that offer insurance which cardholders' minimum payments s they fired, "he said.

Art Caption: LTC product varieties * Employer sponsored insured individual * * LTC insurance premiums the most important long-term care insurance * Cost reduction methods for evaluating the strategy * * Benefits and retention employees

13 February 2009

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