Say Goodbye to Retiree Health Benefits
The results of a survey of Fortune 500 companies by the consulting firm, Watson Wyatt, tells us that there is a growing trend for Fortune 500 companies to reduce or eliminate retiree health benefits. According to the survey:
- Ninety-five percent of the mostly Fortune 500 companies polled expect to further restrict their retiree health plans over the next five years, and 14% plan to stop providing coverage entirely.
- About a third of U.S. employers offered current workers retiree coverage in 2005, down from about two-thirds in 1988, according to a recent study by the non-profit Kaiser Family Foundation.
- According to Standard & Poor's, plans for retiree benefits at S&P 500 companies, excluding pensions, were underfunded by $321 billion, meaning promises to retirees are only 22% funded.
Ouch!