The Employer Costs for Employee Compensation program is a product of the National Compensation Survey, which measures employer costs for wages, salaries, and employee benefits for nonfarm private and state and local government workers.
In addition to retirement and savings the other benefit categories were: life, health, and disability insurance benefits, which averaged $2.32 (8.4 percent); legally required benefits, including Social Security, Medicare, unemployment insurance, and workers’ compensation, which averaged $2.21 per hour (8.0 percent of total compensation); and paid leave benefits (vacations, holidays, sick leave, and other leave), which averaged $1.95 (7.0 percent).
Private industry
In June 2007, private industry employer compensation costs averaged $25.93 per hour worked. Wages and salaries averaged $18.32 per hour (70.6 percent), while benefits averaged $7.61 (29.4 percent). Employer costs for paid leave averaged $1.77 per hour worked (6.8 percent), supplemental pay averaged 78 cents (3.0 percent),insurance benefits averaged $1.97 (7.6 percent), retirement and savings averaged 88 cents (3.4 percent), and legally required benefits averaged $2.21 (8.5 percent) per hour worked.
Retirement and savings benefit costs in private industry
In June 2007, average costs in private industry for retirement and savings benefits were 88 cents per hour worked, or 3.4 percent of total compensation. The average cost per hour worked for defined benefit plans-retirement plans that typically specify a benefit based on age, years of service, and earnings-was 41 cents (1.6 percent of total compensation). The average cost for defined contribution plans-retirement plans usually based on employer contributions to individual employee accounts-was 48 cents (1.8 percent of total compensation). Employer costs for retirement and savings plans are affected by several factors, including the percentage of employees that have access to and participate in the plans offered by their employer.
Among occupational groups, retirement and savings costs ranged from 18 cents per hour worked for service occupations to $1.75 for management, professional, and related occupations. Sales and office occupations averaged 56 cents; production, transportation, and material moving occupations, 85 cents; and natural resources, construction, and maintenance occupations, $1.41 per hour. The proportion of total compensation represented by retirement and savings ranged from 1.4 percent for service workers to 4.8 percent for natural resources, construction, and maintenance workers.
Retirement and savings costs were higher, both in amount and as a proportion of total compensation, for union workers ($2.36 and 6.6 percent of total compensation) than for nonunion workers (71 cents and 2.9 percent of total compensation). Defined benefit plan costs were significantly higher for union workers ($1.71 and 4.8 percent of compensation) than for nonunion workers (26 cents and 1.0 percent of compensation).
Retirement and savings costs were higher per hour worked in goods-producing industries ($1.38 and 4.5 percent of total compensation) than in service-providing industries (75 cents and 3.0 percent of total compensation). There was no significant difference in retirement costs within goods-producing industries; for instance, construction averaged $1.43 per hour and manufacturing averaged $1.27. Costs in service-providing industries varied widely, ranging from 11 cents in leisure and hospitality to $1.46 in financial activities and $1.70 in the information industry.
Among the four census regions, retirement and savings costs ranged from 77 cents per hour in the South to $1.08 in the Northeast. Retirement and savings costs were 90 cents in the Midwest and 86 cents in the West. Within the nine census divisions, retirement and savings costs ranged from 55 cents in the East South Central division to $1.01 in New England and $1.11 in the Middle Atlantic divisions.
Retirement and savings costs increased, both in cost per hour worked and proportion of total compensation, with establishment size. Establishments with fewer than 50 workers averaged 46 cents (2.2 percent), significantly less than establishments with 500 workers
or more, averaging $1.77 (4.9 percent).
