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CCH® BENEFITS — 03/24/11

Benefits Were 30.3% Of Total Compensation In December 2010, BLS Finds

from Spencer’s Benefits Reports: Employer-provided benefits costs for civilian workers in private industry and state and local governments in December 2010 averaged $9.02 per hour worked, accounting for 30.3% of total compensation costs, which averaged $29.72 per hour worked. Benefits as a percentage of compensation have risen in the past three years from 27.4% of total compensation, although that percentage has been relatively stable in the last year and a half. These are among the findings of the December 2010 Employer Costs for Employee Compensation report, produced quarterly by the Bureau of Labor Statistics (BLS).

Insurance benefits averaged $2.62 per hour, or 8.8% of total compensation, in December 2010, representing the largest nonwage employer cost (see chart below). Legally required benefits averaged $2.30 (7.8%), employer costs for paid leave benefits averaged $2.07 (7.0%), and retirement and savings benefits averaged $1.33 (4.5%).

Private industry. According to the BLS, private industry benefits costs averaged $8.11 per hour, accounting for 29.2% of total compensation costs, which averaged $27.75 per hour worked. Private industry employer costs for paid leave averaged $1.89 per hour worked (6.8%), insurance benefits averaged $2.22 (8.0%), retirement and savings benefits averaged 97 cents (3.5%), and legally required benefits averaged $2.28 (8.2%).

Health care benefits, private industry. The average cost for health care benefits in private industry was $2.08 per hour worked (7.5% of total compensation) in December 2010. Among occupational groups, employer costs for health care benefits ranged from $2.42 per hour and 7.9% of total compensation for natural resources, construction, and maintenance occupations; and $2.36 (10.0%) for production, transportation, and material moving occupations. Health care benefits for goods-producing industries averaged $2.87 per hour (8.8% of total compensation), compared with $1.92 (7.2%) for service-producing industries.

State and local governments. In December 2010, state and local government benefits costs accounted for 34.4% of total compensation, or $13.86 per hour worked. Employer costs for insurance benefits averaged $4.81 per hour, or 11.9% of total compensation. The largest component of insurance costs was for health insurance, which averaged $4.66 per hour worked (11.6%). The average cost for retirement and savings benefits in state and local governments was $3.27 per hour worked (8.1%). Costs for legally required benefits averaged $2.42 per hour worked (6.0%).

For more information, visit http://www.bls.gov/news.release/ecec.toc.htm.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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