News & Information

 

FEATURE PRODUCTS

The U.S. Master Pension Guide reflects the latest regulations, rulings and cases for qualified retirement plans, surveying the different type of plans from which an employer may choose, and describing the procedures for obtaining plan qualification.

Learn More »

CCH® BENEFITS — 6/23/08

Benefits Were 30.3% Of Total Compensation In March 2008, BLS Finds

From Spencer's Benefits Reports: Employer-provided benefits costs for civilian workers in private industry and state and local governments in March 2008 averaged $8.63 per hour worked, accounting for 30.3% of total compensation costs, which averaged $28.11 per hour worked. Benefits as a percentage of compensation have risen in the past three years from 27.4% of total compensation, although costs have been relatively stable in the last year. These are among the findings of the March 2008 Employer Costs for Employee Compensation report, produced quarterly by the Bureau of Labor Statistics (BLS).

Insurance benefits averaged $2.40 per hour, or 8.4% of total compensation, in March 2008, representing the largest nonwage employer cost (see chart below). Legally required benefits averaged $2.24 (7.9%), employer costs for paid leave benefits averaged $2.00 (7.0%), and retirement and savings benefits costs averaged $1.26 (4.4%) per hour worked.

Private industry. According to the BLS, private industry benefits costs averaged $7.86 per hour, accounting for 29.4% of total compensation costs, which averaged $26.76 per hour worked. Private industry employer costs for paid leave averaged $1.80 per hour worked (6.7%), insurance benefits averaged $2.06 (7.7%), retirement and savings benefits averaged 96 cents (3.6%), and legally required benefits averaged $2.24 (8.4%) per hour worked.

Health care benefits, private industry. The average cost for health benefits in private industry was $1.92 per hour worked (7.2% of total compensation) in March 2008. In March 2003, employer costs for health benefits averaged $1.41, or 6.3% of total compensation. Among occupational groups, employer costs for health care benefits ranged from 90 cents per hour and 6.8% of total compensation for service workers to $2.77 and 5.8% of total compensation for management, professional, and related occupations. Among other occupational categories, employer costs for health benefits averaged $1.67 (7.9%) for sales and office occupations, less than $2.30 (7.6%) for natural resources, construction, and maintenance occupations, and $2.21 (9.6%) for production, transportation, and material moving occupations.

State and local governments. In March 2008, state and local government benefits costs accounted for 34.1% of total compensation, or $12.89 per hour worked. Employer costs for insurance benefits averaged $4.30 per hour, or 11.4% of total compensation. The largest component of insurance costs was for health insurance, which averaged $4.15 per hour worked, or 11.0% of total compensation. The average cost for retirement and savings benefits in state and local governments was $2.87 per hour worked, or 7.6% of total compensation. Costs for legally required benefits averaged $2.26 per hour worked, or 6.0% of total compensation.

For a complete copy of the BLS report, visit http://www.bls.gov/news.release/ecec.toc.htm.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

Visit our News Library to read more news stories.