Benefits Declining for Retirees
The New York Times has a story that reports even more changes to retirement, Benefits Go the Way of Pensions. We’ve talked about disappearing pensions since we started this site and now we’re seeing the erosion of health benefits too. The article opens with GM’s plans on cutting health care for retirees.
With retirees living longer and accounting rules forcing companies to more honestly reflect their full costs on their books, the corporate-sponsored social contract is no longer sustainable.
There is a financial reason companies are cutting benefits, but these benefits cuts don’t seem to have much of a negative impact on the company when it comes to new employees. “Companies have also noticed that, in many cases, offering a secure retirement package is no longer essential to attract formidable younger talent.” I guess that means people’s expectations are just lower than they used to be. Read the story.
