What are the primary benefit concerns of 2003? It all depends on who you ask.
Employers regard the need to control rising health and welfare costs as the top priority for the fourth consecutive year. Meanwhile, employees say retirement and investment issues are the primary benefits concerns in 2003. This, according to a survey of employee benefits specialists conducted by the International Society of Certified Employee Benefit Specialists (ISCEBS) and the Human Capital Advisory Services practice of Deloitte & Touche LLP.
“Employee concerns over retirement planning continue to be important as a large percentage of the work force nears retirement,” explains Mary L. Komornicka, president of ISCEBS. “With the downturn in the economy, many employees have experienced dramatic decreases in their invested retirement savings and are searching for ways to protect and maximize their nest eggs. Indeed, many employees have been forced to reconsider when they will be able to retire.”
Benefits have also emerged as a major issue among companies seeking to control costs in a difficult economic environment.
As we reported last week, benefit costs averaged 39 percent of total payroll costs in 2001 among employers surveyed by The U.S. Chamber of Commerce. That’s an increase from the previous year, when benefits came in at 37.5 percent of payroll. (To see how some companies are controlling medical benefit costs, see CFO.com’s special report, “Ill Wind: The Health-Benefits Crisis.”)
Altogether, nearly 86 percent of the 437 employee benefits specialists surveyed by ISCEBS and D&T identified controlling health and welfare costs among their top five priorities. This was the top priority across all regions, industries, ages, and genders, the survey added.
“This survey finding re-emphasizes how critical cost management remains for employers,” notes Richard Kleinert, a principal with Deloitte & Touche’s human capital advisory services practice.
What was the second most important benefits issues among employers? Exactly half of the respondents cited compliance with HIPAA and other state and local privacy requirements. Surprising, given that in last year’s survey, privacy concerns did not even rank among the top five priorities.
Rounding out the top benefits issues for employers are: Expanding the use of employee self-service technology for communications and/or administration (38 percent); evaluating/implementing/expanding the use of Internet/intranet applications (36 percent), and providing financial/retirement planning tools and information (33 percent).
By far the most important objective driving benefit program policy and design for 2003 is cost management/reduction (67 percent). Other key objectives include: Employee attraction and retention (12 percent), compliance and fiduciary issues (10 percent), increased use of technology (7 percent), and administrative requirements/alternatives (3 percent).
Employee benefits specialists identified retirement and investment issues as three of the top five benefits issues for employees in 2003. Evaluating current investment options (64 percent) was rated the top concern, followed by evaluating current levels of retirement savings (61 percent).