Employers continue to trim retirement benefits
A lot of older adults assume their retirement benefits, including health and dental coverage, will be available as long as they live.
And they’d be wrong.
Not that long ago, both Bell Canada and Sears eliminated most supplemental benefits for future retirees, joining a growing list of companies putting a lid on soaring retirement obligations.
Right now, a Delaware bankruptcy judge is weighing whether auto parts supplier Visteon Corp. can terminate retiree health care and life insurance benefits for thousands of current and former workers.
The unkindest cut of all: Molson breweries recently announced that it would be phasing out its longstanding policy of providing free beer to retirees. Next year, their allotment will be a dozen bottles a month, down from six dozen a month. What’s worse, in five years, the taps will be turned off completely.
According to a Watson Wyatt survey of 500 major Canadian employers, fewer than half of employers now provide medical coverage for their retirees. And those that do are scrambling to scale back their plans or cap annual payments.
The potential cost to retirees of these lost benefits? Well, a 65-year-old man retiring this year with subsidized retiree health benefits from a former employer would still need to put aside an additional $68,000 to cover further expenses in retirement, says the Employee Benefit Research Institute.And that’s providing he’s comfortable with only a 50 per cent chance of having enough money to look after things, EBRI notes.
More importantly, retirees who aren’t subsidized would need to save at least twice that.
Tell us: Have you noticed any benefits disappearing where you work?
By Gordon Powers, MSN Money
Posted by: PirateKitty | Oct 14, 2021 12:20:04 PM
When my company offered an extra RRSP contribution as an opt-out to the pension plan, I jumped on it! I think trusting my future (pension or benefits) to any company is foolish, especially considering the liklihood of me working with one company for the majority of my working life is slim. At least this way I have control over my money.
Posted by: Lee Mosley | Oct 15, 2021 8:14:10 AM
Why do you post a story that is based on US costs and results when the health care costs here in Canada for a retiree are vastly different to someone in the states? Looking at your link to companies that are putting a lid on costs is a study by Mercers on US companies and information.
Most small and mid sized companies in Canada never have provided benefits for retired employees. If you care to call any of the Canadian Insurance companies you will find that they do not even offer it even if an employer could afford it.
Looking at Major employers in Canada when most people in Canada are employed by small and mid sized companies is misleading in my opinion.