Workers benefits expand greatly, 10-year survey shows
Inflation and a barrage of government laws and regulations have brought on sweeping changes and a sharp expansion in employee benefits during the last decade, according to a study by the Conference Board.
Ranging from health insurance and retirement income to time off with pay, employee benefits have been broadly upgraded and expanded.
The study looked at the practices of more than 1,300 companies in seven types of business. It shows inflation was a major factor in changing corporate-benefits policies between 1973 and 1980, the principal period examined in the study.
The study found, among other things, that inflation and cutbacks in social security benefits have fueled widespread shifts in pension plans. About 80 percent of the plans now base their pensions on employees' earnings during their last years with the company (rather than their average earnings), up from 74 percent in 1973. Most of these pension plans deduct 50 percent of the employee's social security benefits.
The study also found that early-retirement benefits have been steadily liberalized over the last eight years. A growing number of companies are providing fully accrued pensions for employees who retire before age 65. Some 36 percent of the company plans pay full pensions to employees who retire at 62, and 11 percent pay full pensions to those retiring at 60. Only a handful of companies did so in 1973.
Other findings in the study included:
* Companies are offering a variety of capital-accumulation plans. Some 35 percent of the companies have employee-savings plans, up from 18 percent in 1973 ; and 42 percent have employee stock-purchase programs, compared with 32 percent eight years ago. Only 23 percent provide deferred profit-sharing plans, however, down from 30 percent in 1973.
* Life insurance equivalent to two years' salary is provided by 43 percent of the surveyed companies, up from 25 percent in 1973. Employees pay part or all of the associated insurance premium.
* About 53 percent of the companies have severance-pay plans, about the same as in 1973.
* Employees are receiving more time off the job with pay. A four-week vacation is now typically available after 15 years of service. It took 20 years of service to reach this much vacation in 1973. A three-week vacation is generally available after seven years. Some 40 percent of the companies provide floating holidays, up from 13 percent in 1973. Paid time off for religious observances has dropped from 35 percent to 25 percent.