Employers spent an average of $1.29 for employee retirement and savings plans for every hour worked in June 2009, the U.S. Department of Labor’s Bureau of Labor Statistics reported on September 10. This accounted for 4.4 percent of total compensation. Retirement and savings, which includes both defined benefit and defined contribution plans, is one benefit category included in the Employer Costs for Employee Compensation series, along with wages and salaries. Total compensation (wages and salaries and benefits) for civilian workers averaged $29.31 per hour worked in June 2009. Wages and salaries, which averaged $20.42, accounted for 69.7 percent of these costs, while benefits, which averaged $8.89, accounted for the remaining 30.3 percent. Employer Costs for Employee Compensation, a product of the National Compensation Survey, measures employer costs for wages, salaries, and employee benefits for non-farm private and state and local government workers.
In addition to retirement and savings, the other benefit categories were: life, health, and disability insurance benefits, which averaged $2.50 (8.5 percent of total compensation); legally required benefits, including Social Security, Medicare, unemployment insurance, and workers’ compensation, which averaged $2.28 per hour (7.8 percent); paid leave benefits (vacations, holidays, sick leave, and personal leave), which averaged $2.07 (7.1 percent); and supplemental pay which averaged 76 cents (2.6 percent).
Private industry
In June 2009, private industry employer compensation costs averaged $27.42 per hour worked. Wages and salaries averaged $19.39 per hour (70.7 percent), while benefits averaged $8.02 (29.3 percent). Employer costs for paid leave averaged $1.85 per hour worked (6.8 percent); supplemental pay averaged 83 cents (3.0 percent); insurance benefits averaged $2.13 (7.8 percent); retirement and savings averaged 95 cents (3.4 percent); and legally required benefits averaged $2.26 (8.3 percent) per hour worked.
Retirement and savings benefit costs in private industry
In June 2009, average costs in private industry for retirement and savings benefits were 95 cents per hour worked, or 3.4 percent of total compensation. The average cost per hour worked for defined benefit plans – retirement plans that typically specify a benefit based on age, years of service, and earnings – was 41 cents (1.5 percent of total compensation). The average cost for defined contribution plans – retirement plans usually based on employer contributions to individual employee accounts – was 53 cents (1.9 percent of total compensation). Employer costs for retirement and savings plans are affected by several factors, including the percentage of employees that participate in the plans offered by their employer.
(The National Compensation Survey produces comprehensive data on the percentage of workers with access to and participation in retirement plans. Data for March 2009 were recently released and are available at http://www.bls.gov/news.release/pdf/ebs2.pdf).
Among occupational groups, retirement and savings costs ranged from 21 cents per hour worked for service occupations to $1.89 for management, professional, and related occupations. Sales and office occupations averaged 60 cents; production, transportation, and material moving occupations, 84 cents; and natural resources, construction, and maintenance occupations, $1.50 per hour. The proportion of total compensation represented by retirement and savings ranged from 1.6 percent for service workers to 4.8 percent for natural resources, construction, and maintenance workers.
Retirement and savings costs were higher, both in amount and as a proportion of total compensation, for union workers ($2.44 and 6.6 percent of total compensation) than for non-union workers (77 cents and 2.9 percent of total compensation). Defined benefit plan costs were significantly higher for union workers ($1.75 and 4.7 percent of compensation) than for non-union workers (25 cents and 1.0 percent of compensation).
Retirement and savings costs were higher per hour worked in goods-producing industries ($1.46 and 4.5 percent of total compensation) than in service-providing industries (83 cents and 3.2 percent of total compensation). Retirement costs within goods-producing industries averaged $1.65 per hour in construction and $1.28 per hour in manufacturing. Costs in service-providing industries varied widely, ranging from 11 cents in leisure and hospitality to $1.52 in the financial activities industry.
Among the four census regions, retirement and savings costs ranged from 77 cents per hour in the South to $1.18 in the Northeast. Retirement and savings costs were 1.02 cents in the West and 94 cents in the Midwest. Within the nine census divisions, retirement and savings costs ranged from 54 cents in the East South Central division to $1.19 in the Middle Atlantic division.
Retirement and savings costs increased, both in cost per hour worked and proportion of total compensation, with establishment size. Establishments with fewer than 50 workers averaged 49 cents (2.2 percent), significantly less than establishments with 500 workers or more, averaging $1.92 (4.9 percent).
Since June 2004, private industry retirement and savings costs in proportion to total compensation were similar at 3.5 percent vs. 3.4 percent currently. Defined benefit cost percentages in June 2004 were 1.7 percent of total compensation compared with 1.5 percent in June 2009 while defined contribution percentages were similar at 1.8 percent vs. 1.9 percent. In comparison, state and local government retirement and savings costs in terms of total compensation have increased from 6.2 percent in June 2004 to 8.0 percent currently. State and local government defined benefit costs have increased in terms of percent of total compensation from 5.5 percent in June 2004 to 7.2 percent in June 2009 while defined contribution percentages were similar at 0.7 percent vs. 0.8 percent.
Read the full report and view all of the data tables by clicking on the link below:
http://www.bls.gov/news.release/ecec.nr0.htm
