Posted on: Thursday, February 5, 2004

Survey finds workers skeptical about keeping retirement benefits

By Adam Geller
Associated Press

NEW YORK — Workers expect that employers will cut more of their retirement benefits — and three-quarters of companies have either done so or plan to, a new survey says.

More than 40 percent of the employers queried have reduced medical benefits for workers who will retire in years to come and an additional 35 percent of the employers said they are likely to do so, according to the survey released yesterday by personnel consulting firm Towers Perrin.

More than two-thirds of the employers said they have shifted more medical costs to former workers who are retired.

In addition, more than 40 percent of the employers that used to carry traditional pension programs have converted to cash-balance or other hybrid plans.

"I think the study confirms the reality of retirement," said Kathleen FitzPatrick, a Towers Perrin senior consultant in Dallas.

The new reality is not lost on workers, with 78 percent saying they expect to continue working in some capacity during retirement. About 35 percent of those said they would do so for financial reasons; 43 percent said they would do so to stay active.

Most workers expect employers to continue offering retirement benefits, but at lower levels.

More than six out of 10 said they expect employers to shift more medical costs to workers in their retirement years.

Forty-one percent said they expect reductions in Social Security benefits, too, but with the program itself remaining intact. But 28 percent said they expect the government to end Social Security.

About 60 percent want to see Medicare replaced with a national healthcare system.

The survey tapped more than 2,000 randomly chosen workers and 365 personnel officers at 340 medium and large companies last fall.