Retirement and savings benefit costs in private industry
In June 2012, average costs in private industry for retirement and savings benefits were $1.02 per hour worked, or 3.5 percent of total compensation. Private industry retirement and savings benefit costs for management, professional, and related occupations were $2.07 per hour, or 4.0 percent of total compensation in June 2012. Costs were lowest among service occupations, 22 cents or 1.6 percent of total compensation. (See table 5.) Included in retirement and savings benefit costs were employer costs for defined benefit and defined contribution plans. 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.
In June 2012, 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 43 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 59 cents (2.1 percent of total compensation).
Retirement and savings benefit costs were higher, both in amount and as a proportion of total compensation, for union workers ($2.89 and 7.4 percent of total compensation) than for nonunion workers (83 cents and 3.0 percent of total compensation). Defined benefit plan costs were significantly higher for union workers ($2.11 and 5.4 percent of total compensation) than for nonunion workers (26 cents and 0.9 percent of total compensation). Defined contribution costs for union workers were higher (78 cents) compared to nonunion workers (57 cents).
Retirement and savings benefit costs increased, both in cost per hour worked and proportion of total compensation, with establishment employment size. Establishments with fewer than 100 workers averaged 62 cents per hour worked (2.6 percent of total compensation) for retirement and savings costs. Establishments with 100 to 499 workers averaged $1.09 per hour worked (3.7 percent), significantly less than establishments with 500 workers or more which averaged $2.09 (4.9 percent). Defined benefit costs ranged from 23 cents per hour worked for establishments with 1 to 99 workers to $1.00 per hour worked for 500 workers or more. Defined contribution costs also showed increases by establishment size from 39 cents per hour worked for 1 to 99 workers to $1.10 per hour worked for 500 workers or more.
Employer retirement and savings benefit costs for full-time workers in private industry averaged $1.30 per hour worked (3.9 percent of total compensation), significantly higher than 23 cents for part-time workers (1.5 percent). Retirement and savings costs for full-time workers in management, professional, and related occupations averaged $2.26 per hour worked, compared with 71 cents for part-time workers. Employer retirement and savings benefits costs for service workers were significantly lower than all other occupational groups at 36 cents for full-time workers and 8 cents for part-time workers.
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