Trends in Benefits for 2011

The International Foundation of Employee Benefit Plans has developed a broad employee benefits survey to benchmark the benefit offerings and design of four distinct employment sectors throughout the United States and Canada.

International Foundation and International Society of Certified Employee Benefit Specialists members were surveyed online in spring 2010, resulting in 1,315 responses from corporations, professional service firms, public employers and multiemployer benefit plans.

The survey report—Employee Benefits Survey: U.S. and Canada 2011—examines all types of benefits: pensions; health, dental and prescription drug plans; life insurance; sick leave and disability benefits; work/life benefits; holidays; vacation benefits and paid-time-off banks; voluntary benefits; leaves of absence; survivor benefits and executive perquisites.

Among the highlights:

U.S. Results

Results Specific to Corporations:

• More than two in five (46.1%) corporations offer one or more high-deductible health plan options. The most common arrangement is a high-deductible plan with a health savings account (HSA) (28.2%).
• Nearly all (97.9%) corporate respondents offer dental benefits. Of those with this benefit available, the most commonly provided plan is a dental preferred provider organization (PPO) (82.9%). Typical deductibles are $50 for single coverage and $150 for family coverage.
• When compared to the other sectors, corporations (82.7%) are the most likely to offer one or more defined contribution (DC) pension plans. Among these respondents, the most common is a 401(k) plan, at 86.5%.
• About half (49.2%) provide survivor benefits to dependents upon an employee’s death. Access to an employee assistance plan (EAP) is the most commonly provided survivor benefit, followed by the payout of accrued vacation, sick time or other paid time off.
• Four in five (80.8%) corporate respondents offer at least one type of voluntary (employee-pay-all) benefit; among these, life insurance is the most commonly available (74.5%).
• Almost three in five (59%) corporations offer some type of financial or retirement planning assistance. Among those offering the benefit, retirement counseling is widely available, at 90.7% of respondents.


Results Specific to Professional Service Firms:

• Some type of flexible benefit arrangement is offered by three-quarters of firms. Among these firms, the most popular offering is a health flexible spending account (FSA) (79.4%).
• Nearly all (94.9%) respondents in this sector offer prescription drug benefits. If cost-management techniques are used, the most popular are three or more tiers for cost sharing (89.2%), mail-order drug programs (88.3%) and the use of drug formularies (76.7%).
• Two-thirds (67.5%) of DC plan sponsors in this sector use some type of automatic feature. Among these firms, the two most popular features are target-retirement-date (66.2%) and target-risk investment funds (45.5%).
• Nearly half (47.4%) of professional service firms offer paid floating holidays to their employees, with most providing two days.
• The most common amounts of vacation granted based on years of service are ten days after one year of service, 15 days after five years of service, and 20 days after ten and 20 years of service.
• Respondents in the professional service sector are somewhat less likely to offer work/life benefits (61.3%) than respondents in the other sectors. As with the other sectors, however, flexible workhours or compressed workweeks (71.6%) and dependent care flexible spending accounts (66.3%) are the most common work/life offerings. More than half (52.6%) of firms with these benefits allow telecommuting.

Results Specific to Public Employers:

• Three in five (61.3%) public employers completely or partially self-fund health care benefits.
• Public employers often offer other types of health care benefits; if so, coverage for chiropractic services (79.3%), mental health benefits (78.2%), vision care (72.4%) and retiree health care benefits (69%) are common.
• Nearly nine in ten (88%) responding public employers offer some type of defined benefit (DB) or hybrid pension plan.
• Three in five (60.5%) public employers offer one or more DC pension plans. Among these employers, the most popular plan is a 457 plan (76.1%). About one-third (32.8%) have a 401(a) plan.
• Paid sick leave is offered by most public employers (94.1%); 79.6% offer long-term disability and 59.8% offer short-term disability benefits.
• Nearly all (94.2%) offer additional types of leave. Among these respondents, paid jury duty leave is prevalent (92.8%) as is paid bereavement leave (89.7%).

Results Specific to Multiemployer Plans:

• Most (69.7%) multiemployer plans use one or more provisions to help workers retain health care coverage during periods of unemployment or noncovered employment. If provisions are used, more than two-thirds (67.3%) allow participants to pay for their own coverage if no employer contributions are made.
• Dental benefits are offered by 86.4% of those responding from this sector; dental PPOs are the means by which these benefits are most often available (61.3%).
• Nearly nine in ten (88.3%) multiemployer respondents offer some type of DB or hybrid pension plan.
• More than half (58.1%) offer at least one DC pension plan. Among these DC plan sponsors, most offer a money purchase (44.2%) or 401(k) (34.6%) plan.
• Paid life insurance is offered by 77% of multiemployer plans, typically as a flat dollar benefit (95.5%). When a flat dollar amount is provided, more than half (52.6%) report a benefit of less than $15,000.
• Nearly one quarter (23%) report offering their participants some type of financial or retirement planning assistance. Among these plans, retirement planning or counseling is more likely to be offered (94%) than financial planning (56.7%) or credit counseling (20.9%).

Canadian Results

Results Specific to Corporations:

• Prescription drug coverage is provided by all responding corporations as part of an extended health care plan. Tiered cost sharing is used by three-quarters (75.8%) of corporations that have implemented measures to manage drug costs.
• More than half (54.2%) use a flexible benefit arrangement. The most common option is a health care spending account (HCSA), offered by more than three-quarters (76.9%) of respondents with flex plans.
• Three in five (61.5%) corporations with a DC plan use some type of automatic feature. When a feature is used, the most popular is a target-retirement-date investment fund (66.7%). More than half (58.3%) have implemented automatic enrollment.
• Seven in ten (72.9%) corporate respondents provide survivor benefits to dependents upon a worker’s death. Among the companies offering this category of benefit, most continue extended health benefits for dependents of active participants (86.3%). Also common is providing access to an EAP (58.8%).
• Half of corporate respondents offer at least one type of voluntary (employee-pay-all) benefit; life insurance is the most commonly available.
• Among corporations providing paid holidays, most (94.4%) offer at least ten days, with 11 the most common.

Results Specific to Professional Service Firms:

• Professional service firms are slightly more likely than respondents in the other sectors to fully insure extended health benefits—53.1% fully insure while 46.9% partially or completely self-fund.
• Nearly nine in ten (87.9%) firms offer dental plan coverage. As with the other sectors, imposing a deductible for dental care is more the exception than the rule.
• Group Registered Retirement Savings Plans (Group RRSPs) and registered DC/money purchase plans are equally popular among DC plan sponsors, at 60.9%.
• Nearly all (90.9%) firms provide paid holidays. Of these, nine in ten (93.3%) offer at least ten holidays. Twelve days is slightly more common than ten or 14.
• Long-term disability is offered by most professional service firms (90.9%); 84.8% offer paid sick leave and 69.7% offer short-term disability.
• Special perquisites are offered to executives in 61.3% of responding firms. Among these, the most commonly provided perk is a subsidized cell phone, pager or handheld device (63.2%).

Results Specific to Public Employers:

• Prescription drug coverage is a benefit offered by nearly all (97%) public sector employers surveyed. Popular cost-management methods in this sector include three or more tiers for cost sharing, drug formularies and mandated generic drug use.
• All but two responding public employers offer dental plan coverage. Most (85.2%) do not impose a deductible.
• Most (86.2%) responding public employers offer some type of DB pension plan or hybrid/combination plan. The formula most commonly used to determine benefit payments is based on best average earnings (79.2%).
• One-quarter (24.1%) offer a DC pension plan. Among these respondents, a registered DC or money purchase plan is most common at 85.7%, followed by a Group RRSP at 42.9%.
• Paid sick leave is offered by most public employers (96.6%); 93.1% offer long-term disability and 53.6% offer short-term disability benefits.
• Nine in ten (93.1%) respondents provide additional types of paid and unpaid leave. Of the employers doing so, all provide paid bereavement and jury duty leave.

Results Specific to Multiemployer Plans:

• All responding multiemployer welfare plans offer extended health care plans to participants.
• These extended care plans are most likely to be completely or partially self-funded (84.6%) rather than fully insured (15.4%).
• Most (85.7%) responding multiemployer plans use one or more provisions to help workers retain health care coverage during periods of unemployment or noncovered employment. Of these, all allow participants to pay for their own coverage if no employer contributions are made. Two-thirds (66.7%) make use of hour banks and reciprocity agreements.
• All but two responding multiemployer plans offer some type of DB pension plan or hybrid/combination plan. More than half (53.8%) use a dollar amount formula to determine the benefit amount.
• Seven in ten (71.4%) plans offer some type of financial or retirement planning assistance to their participants. Of these, all provide retirement planning or counseling.

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