Are retiree health benefits on the way out?
According to recent research from Fidelity Investments, roughly two thirds of those approaching retirement say rising health care costs is getting higher on their list of financial concerns (outliving savings and inflation being the other worries).
And, with people living longer and the number of retirees increasing each year, it seems their their employers feel exactly the same way.
Ten years ago, 62% of employers offered medical and/or dental retiree benefits to new hires. In 2011, that number dropped to 49%, according to Aon Hewitt. And it's likely to go lower still.
Many employers have decided that it makes little sense to provide retirees with the same coverage they enjoyed while working and are now scrambling to cancel, scale back, or somehow cap their soaring retirement obligations.
But that's short sighted, argues Jamie Marcellus, of First Health Care Services of Canada, suggesting that employers look at such benefits as an important recruitment and retention perk in light of an aging workforce.
Long-term care insurance (insurance that pays for home care and/or nursing home expenses), for example, seems to be an increasingly attractive option, he maintains, citing the most recent 2012 Sanofi Canada Healthcare Survey.
The study suggests that expectations are especially high among employees aged 55 and older (69%), and those who work for large companies (67% for companies with 5,000 or more employees).
Employees who work for government are most likely to expect retirement benefits (72%), while non-unionized (39%) and private sector (37%) employees are the least likely.
Where do you fit in? Do you expect to see your workplace benefits follow you into retirement? Has anything changed in this regard recently?
By Gordon Powers, MSN Money
Posted by: Pat B | Jun 27, 2021 2:09:25 AM
It sure has changed! As the recipient of a survivor's pension (BC Public Service) recent changes have mean that I have to subscribe on my own to the Medical Services Plan and also extended health benefits are no longer included in the pension.
Posted by: SP | Jun 27, 2021 5:15:26 AM
I'm still working and have no illusions of there being any retirement health benefits coverage when I reach retirement (if I ever retire).
With people living longer and with more chronic conditions, the notion that people can work for 25 years at a company and then retire for 50 years with perks will have to be 're-examined'.
I started work and met a few of the 25 & out crowd, but like the Greeks picking through garbage cans for food now, change is in store for Canada in the future.
We've got a situation where the preceding generation hasn't had enough children and all want to be bailed out by other peoples children while living high on the hog (relative to contributions).
Sadly, demographics and the laws of physics cannot be changed.
(even immigrants will go on a taxpayer strike at some point).
Posted by: Stephanie | Jun 27, 2021 9:09:14 AM
You have GOT to be kidding me..! I have been in the workforce for 35 yrs or so - 55 yrs old female. Have been in sales most of my career and never even thought of getting health benefits AFTER I retire. Yes, I work in non unionized & private sector and I think it's ONLY companies with unions that would have an outragious golden perk like benefits AFTER they leave. Truth be told, I see benefits of unions good for helping with equal pay, however unions very often breed mediocracy because it's not the best persosn who gets promoted but the one with most seniority AND people who are not performing or are caught doing something wrong (even criminal) get backed by the union. I know of a person who stole from the store he worked at & the union backed him & he was able to keep job. This is more about expectaions and feeling entitled -- get over it.
Posted by: frans michiels | Jun 27, 2021 11:46:22 AM
people who work for the government and unions keep feeding at the trough not thinking of were the money is coming from and wonder when companies move out of canada . at least the animal version has a use once its fat and ready for market .
I must add that a lot of people in the private sector unions are hard workers and end up paying for the bad ones.
Posted by: Anonymous | Jun 28, 2021 1:08:49 PM
My brother, worked for Ontario Hydro for 30 Years, retired with 60% of his anual salary of over $100,000.00/yr, most Ontarians would remember this as there is a debt repayment fee indicated on their monthly bill. All of his 5 kids have had braces on their teeth, they are all going to univerisity, and 2 of them are laughing at us cause they have no intention of working at all. Since his retirement, he has started up a consulting firm which makes him over $200,000.00/yr, he pays nothing into any form of medical or dental benefits, but still reaps the benefits through us, the taxpayers. Teachers are no better, they want everything and work just slightly more than a homeless person. I can hardly wait to see how McGuinty handles this one when the contract comes due, I can only hope that he turns gay as opposed to succuming to the power that lays between his teacher's wife's legs. We'll have to wait and see.
Posted by: Mr. Negative | Jul 3, 2021 9:55:19 AM
My predication is pain! The union bust is and will always be to get cheaper labour. The younger generations will not have retirement plans, (you will have to save for retirment) The question of benefits after leaving the workforce, well that probably won't happen either. I never expect to get paid by anyone for doing nothing - let alone have benefits.
The world is in the position as the past generation wrote themselves their own luxurious tickets!