Towers Perrin Survey Finds Most Companies Staying the Course

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May 1, 2009

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TOWERS PERRIN; Towers Perrin Survey Finds Most Companies Staying the Course When It Comes to Employee Benefits

Despite the pressures of the economic crisis, most U.S. companies continue to view their retirement as a vital part of their workplace relationship with employees, even as they struggle to balance cost and talent management issues, according to a survey of close to 500 HR and benefit executives conducted in February by professional services firm Towers Perrin.

Relatively few of the respondent companies are taking precipitous action right now, in terms of dramatically reducing or eliminating current benefit plans. While that s partly a result of a decade-long focus on plan redesign and cost management, the findings confirm the extent to which most companies are staying the course, at least for the present. In fact, the results indicate many are using the current crisis to find the right balance between cost reduction and talent management, positioning benefits as part of a more holistic deal, with employees -- one built on shared responsibility for costs and risks.

While companies appear to be trying to keep their programs as consistent as possible, the survey results did underscore the current mood of trepidation in the workplace, given the financial pressures many people now face. As evidence, between 30% and 60% of the survey respondents said that their employees were postponing plans to retire, reducing participation in 401(k) plans and increasing hardship withdrawals and loans from the plan. Only 7% predicted any uptick in 401(k) participation.

In the face of these actions, employers generally are stepping up efforts to address employee concerns through heightened communications and education, and to position benefits as part of a more holistic total rewards package, or deal, with employees.

It s encouraging that a majority of employers in this survey do not seem to let current concerns outweigh their long-term commitment to their employees, said Mike Archer, Towers Perrin s chief actuary and a Principal in the firm s retirement practice. That s a particularly welcome sign for employees at a time when there is so much anxiety about future security. It should have a marked impact on employees level of engagement and productivity, both of which are critical elements in helping companies survive and thrive.

Keywords: Towers Perrin.

This article was prepared by Insurance Weekly News editors from staff and other reports. Copyright 2009, Insurance Weekly News via VerticalNews.com.