Article on Vesting Retirement Benefits
While retirement seems like the time to relax and unwind after years of slaving over your job, coasting off to the vacation spot with your nest egg and gold watch is becoming less of a given and more of a luxury. Playing that lazy round of golf might have to wait, as today, many workers feel the financial need to either remain at a job several years longer than they ever expected, or seek entirely different work in retirement, thus postponing the relaxation that retirement was supposed to offer. One of the reasons for this sad reality is the increasing lack of health care provided to employees by their employers. A study by the Department of Labor found that only 34% of retirees over age 55 were covered by employer-sponsored health care plans in 1994, a decrease of 10% from 1988. Other reports indicate that this number has decreased yet again since the early 1990s. Much of this decrease in providing of retirement health coverage is due to the precarious financial status of our nation. The United States has been mired in its worst economic crisis of the past 60 years, and employers are trying to make financial decisions that will increase profits, even at the expense of those who have worked to build the company to its current status.
The nation as a whole is getting older, as ―baby boomers are aging and moving towards retirement. As those individuals eventually retire, employers likely face a tremendous burden of paying retirement and health benefits to all of them. According to the Census Bureau, between the years 2005 and 2025, the number of people 55 to 64 will increase by 36.4%, and those aged 65 and older will increase by 73.1%, while those between the ages of 25 and 54 will increase by only 3.8%. Those aged 65 and older will make up nearly 19% of the population, and many of them will be retired, or heading towards retirement. Along with the increase in retirement-aged individuals, the life expectancy of Americans has steadily increased and now stands at more than 78 years. This increase means that Americans are spending more time living in those retirement years, and thus costing more for employers who pay for health benefits.
As a result, many employers are keeping older employees in lesser capacities in an attempt to avoid losing tremendous numbers of workers to retirement and to avoid paying retirement benefits to all of those workers once they are gone. So far, some major companies have actually taken steps to eliminate altogether the distribution of health benefits to retirees. This type of action can strike fear into the minds of those who are counting on those employee benefits once they retire.