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Benefits June 8, 2010
Washington-Baltimore Employers Increasingly Move to DC Plans
June 8, 2010 (PLANSPONSOR.com) – More employers in the Washington-Baltimore region are offering defined contributions plans rather than pensions, according to an annual survey of human resources officials.
Reported by Rebecca Moore
This year, 98% of employers participating in the fifth annual Washington-Baltimore Metro Region Benefits Survey Report said they offer defined contribution retirement plans such as a 401(k) or 403(b), compared with 72% last year. Only 19% of employers this year said they offer pension plans, compared with 23% last year, the Washington Post reports.
In addition, many employers that suspended their DC plan company match contribution for 2009 said they resumed them this year, in many cases at 10%, down from 13.5% before the recession, according to the news report.
To hang on to good part-time workers during the recession, 73% said they offer leave benefits to part-time employees, compared with 61% last year, and many extended medical, dental and 401(k) plans to employees who worked as few as 20 hours a week. Employers “are trying to produce more with the folks they have. They’re saying, ‘Let me not overcommit my financial resources by bringing on new people,’ ” said Angelo Kostopoulos, president of Akron, a District-based firm that conducted the survey for the Human Resource Association of the National Capital Area, Washington Area Compensation and Benefits Association, and local chapter of Worldwide Employee Benefits Network.
The recession and rising health-care costs has also led more employers to shift expenses to workers. This year, 25% said they raised co-payments, compared with 23% in 2009 and 20% in 2008. The news report said workers are being hit hardest by out-of-pocket expenses for medical care; 13% of employers reported their workers experienced increases in those costs this year, compared with 8% in 2009 and 4% in 2008.
The survey also found high-deductible consumer-driven health plans are growing (26% of employers are offering them this year vs. 7% in 2006), but wellness programs, such as weight loss and smoking cessation courses, are losing traction (13% this year vs. 14% in 2009).
The 247-page study is based on a survey of 256 public and private employers with a total workforce of more than 224,000.