2. RMI 4330 Employee Benefits J. Allen Seward

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

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

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

6. Significance of Employee Benefits n 42% of payroll –8.9 % social insurance –7.5 % pensions –10.5 % medical n $1.5 trillion in benefits

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

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

9. Retirement Plans n 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

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

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