Future of Retirement Benefits

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By: Asha Kurian --

03 August, 2012

Future of Retirement Benefits
WHITEPAPER

The Reform passed by the Congress has a significant impact on the retirement benefits offered by employers to employees. Employers find the cost of retirement plans increasing at an enormous rate and shifting to DC model offered by private exchanges is the right move. The companies in U.S. offered retirement options based on Defined Benefits model, thus being subjected to a significant portion of the healthcare risk and cost of its employees. As per this model, the employees were offered a standard set of health benefits. But, as the healthcare cost skyrocketed over the years, the employers shifted to Defined Contributions model. This model has undergone various changes and is evolving as we speak. As per this model, the employers contribute to savings accounts that can be used by employees to purchase insurance products as per their requirement. This allows the employer to control its healthcare expenses. The implementation of Reform increases the affordability of healthcare for individuals and small businesses; the large employers would shift to private exchanges as measure to control cost.