Retiree Health Plans Waning
CHICAGO — Most U.S. employers are planning to further scale back health benefits offered to retirees as companies struggle with medical inflation.
Ninety-five percent of the mostly Fortune 500 companies polled expect to further restrict retiree health plans over the next five years, and 14% plan to stop providing coverage entirely, a survey of 163 companies by consultants Watson Wyatt found.
About a third of U.S. employers offered current workers retiree coverage in 2005, down from about two-thirds in 1988, according to the Kaiser Family Foundation. A Standard & Poor’s study showed that retiree benefit plans at S&P; 500 companies, excluding pensions, were only 22% funded.
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