Peer Reviewed
Lynn K. Saubert is a Professor of Accounting; Daniel Davidson
ddavidson@radford.edu is a Professor of Business Law; and R. Wayne Saubert
is a Professor of Accounting at Radford University.
ABSTRACT
The landscape of worker benefits is changing in the United States. A
combination of high costs and high potential liability has resulted in employers
moving away from providing traditional defined benefit pension plans into offering
defined contribution plans or some other employee-financed and managed plan.
With the rising cost of health insurance, employers are changing the coverage
provided to employees – if any coverage is provided – to plans calling for higher
employee contributions toward the premiums and to higher co-payment
requirements. Firms are also examining “wellness” standards for employees in
an effort to contain costs. Retirees are finding that they may not have any
employer-funded health insurance coverage. Today many employees face a
very different work environment and a much more difficult time preparing for
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retirement. A recent decision by GM to eliminate health insurance coverage for
retired salaried employees illustrates how the cost of benefits can significantly
impact employers, as well as how the implementation of cost-containment
decisions impact employees and even retirees. This paper discusses some of the
most important topics in these areas.
INTRODUCTION
The landscape of worker benefits is changing in the United States. Gone
are the days when a person worked at one job for most of his or her working life,
with a defined benefit pension plan to provide retirement benefits, fully funded
health insurance coverage that often extended into the retirement years, and job
security. Instead, we have a more mobile work force and a less stable
employment environment. Workers expect to change jobs several times over the
course of their working lives, often into totally new fields. This results in frequent
“gaps” in he