NEW YORK - Fewer large employers provide both defined benefit and defined contribution plans to their employees, according to a new report by consultant William M. Mercer Inc., New York.
Seventy-five percent of companies surveyed with more than 50,000 employees offered both types of plans in 1995. By 2000, only 64% of companies offered both, and by 2001, the number had dropped to 60%.
In comparison, 50% of companies with fewer than 2,000 employees offered both types in 2001.
Utilities and non-durable manufacturers were the most likely to maintain both plan types. High-tech employers were the least likely, according to the report.
Cash balance plans, meanwhile, have increased in popularity. In 2001, they were offered by 19% of employers, compared with 16% a year ago, and 7% in 1997. At 69%, however, the traditional final-average-pay pension plan is still the most prevalent.
"Benefits don't change dramatically from year to year," said Mercer consultant Kent Gregory in Louisville, Ky. "But from looking at several years' worth of data, you do notice trends."
The eighth-annual Spotlight on Benefits Report, prepared by Mr. Gregory, analyzed data as of June 30 from more than 700 large U.S. organizations.
Financial industry tops
Mr. Gregory's analysis also found the financial industry pays the highest level of retirement and savings benefits to its employees, at 34% above the overall market median. The insurance industry ranked second, with 23% higher benefits. The utilities and durable manufacturing industries followed, at levels 21% above the median.
Levels of benefits also varied among geographic regions. Employees in the North Central states saw 11% higher retirement and savings benefit levels than the overall market median this year. Those in the Northeast took advantage of 10% higher levels.
The other side of the country saw the reverse of the picture. West Coast employers provided the lowest retirement and savings benefit levels, at 82% of the market median. In the South Central states, levels were at 91%.
Those employees most deprived of benefits worked in the combined industry of arts, entertainment and recreation - where retirement and savings levels were a meager 37% of the median. In the professional, scientific and technical industry, benefit levels were 73% of the median.
The report "is more of a confirmation," Mr. Gregory said. "It reinforced what we knew."
It did reveal striking contrasts, however, as those same arts and entertainment employers offered health and group benefits at levels of 88% of the median. The utilities industry led the health category, at 19% above the median. And, in the finance industry, health and group benefits dipped to 95% of the median.