RMI 4330 Employee Benefits J Allen Seward What

RMI 4330 Employee Benefits J. Allen Seward

What are employee benefits? n Narrrow definition: Employer provided – death – accident – sickness – retirement – unemployment

Broader definition n Social insurance – social security – unemployment – workers’ compensation – temporary disability n plus. . .

Broad definition (continued) n Private insurance and retirement plans – – – – old age death disability medical dental legal property/liability n Other – – n vacations sick leave jury duty maternity or sabbatical extra cash payments – education and moving n services in kind – cafeterias, wellness

Significance of Employee Benefits n 42% of payroll – 8. 9 % social insurance – 7. 5 % pensions – 10. 5 % medical n $1. 5 trillion in benefits

Significance of Social Insurance Over 43 million people receive social security (other than medicare) n 37 million receive Medicare n PV(survivors benefits)>$13 trillion n

Group Medical Expense Insurance 1970 expense = $20 billion n 1995 expense = $300 billion n covers 210 million persons n

Retirement Plans 80 million people privately covered n additional 24 million covered under federal, state and local plans n assets of private plans = $3. 6 trillion n 15 million current pension recipients other than social security n

Growth of employee benefits Industrialization and turn of century n tax code in the 1920 s n WWII n – wage and price controls n Inland Steel in 1948

Assignment n Question 2 at end of chapter – do not turn it in! – quizzable n Read chapters 2 and 3!