Companies plan modest changes to employee benefits packages

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About one-third of chief financial officers and senior comptrollers in the U.S. plan to cut health care benefits at their companies, according to a new Grant Thornton survey.

The biannual survey found that 30% of 516 survey participants anticipate making cuts to their firm’s health benefits. Another 18% intend to reduce the stock options/equity-based compensation for their employees.

The results indicate that the U.S. economy’s recovery continues to be a slow one and that companies continue to seek ways to cut costs on benefits paid to employees.

The majority of respondents (84%) cited employee benefits, including health care and pensions, are their greatest pricing pressure. Six months ago, only 68% of survey participants cited employee benefits as the greatest pricing challenge.

Company insurance, excluding health care, ranked fifth, with 11% saying it causes pricing pressure, a reduction from the 19% who cited it in March’s survey. In between employee benefits and company insurance were raw materials (27% in October), energy (21%) and other (12%), according to the Grant Thornton survey.

Employers considering cuts to their 401(k) match, a popular cut since the financial market’s collapse in 2008, appears to be subsiding, with 11% fewer CFOs planning to decrease the amount, according to the latest results. In April, 21% planned decreases. In October, the number had fallen to 10%.

Just 5% of companies intend to boost life insurance benefits, while another 86% will keep them the same and 9% will cut them, according to the survey. By comparison, just 2% intended to increase the benefit in March.

Disability benefits should remain the same in 86% of the companies, while 6% will increase them and 8% will decrease them. In March, just 1% were planning increases and 10% expected to make cuts to disability benefits.

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