'Employee Tenure, 2008,' and 'Retiree Health Benefit Trends Among the Medicare-Eligible Population'

January 2010, Vol. 31, No. 1
Paperback, 20 pp.
PDF, 500 kb
Employee Benefit Research Institute, 2010

Download Notes PDF pdf

Executive Summary

Employee Tenure, 2008


TENURE LARGELY UNCHANGED OVER 25 YEARS: Data on employee tenure—the amount of time an individual has been with his or her current employer—show that career jobs never existed for most workers, and still do not. The median tenure of workers—the midpoint of wage and salary workers’ length of employment in their current job—was virtually unchanged over the past 25 years: 5.1 years at the same job in 2008, compared with 5.0 years in 1983.


GENDER DIFFERENCES: Behind those overall results are very different trends by gender. The median tenure for male wage and salary workers declined (from 5.9 years in 1983 to 5.2 years in 2008) while it increased for female wage and salary workers (from 4.2 years in 1983 to 4.9 years in 2008), leaving the overall level essentially unchanged. PUBLIC VS.


PRIVATE SECTOR: Private-sector workers’ median tenure also held steady over the period, near the 3.9- year level of 2008, but the median tenure for public-sector workers increased from 6.0 years in 1983 to 7.0 years in 2008. Over this 25-year period, median job tenure in the public sector increased significantly relative to the private sector, and currently is about 80 percent higher than that of the private sector. Almost 10 percent of public-sector workers have 25 or more years of tenure (significantly more than the private sector), which leaves public-sector employers facing the retirement of a sizable portion of their most experienced work force in the near future.


 


Retiree Health Benefit Trends Among the Medicare-Eligible Population


IMPACT OF ACCOUNTING STANDARDS: Perhaps the single most-important factor that has affected the availability of health benefits for retirees through former private-sector employers was a 1990 accounting rule. FAS 106 required companies to record and disclose retiree health benefit liabilities on their financial statements and triggered many of the changes to retiree health benefits, most notably the sharp decline in the benefits being offered. GASB Statements No. 43 and 45, which impose new accounting standards on public-sector sponsors of retiree health benefits, are similar to FAS 106 and will have a similar, if not greater, impact on the financial statements of public-sector entities.


DOWNWARD TRENDS: As a result of FAS 106 and the rising cost of providing retiree health benefits, most U.S. private-sector workers will never become eligible for health insurance in retirement through a former employer. Fewer employers are offering health benefits to future retirees; when those benefits are offered, eligibility criteria are becoming harder to meet; and employer subsidies are disappearing. In 2008, 26 percent of 65–69-year-olds had retiree health benefits, down from 32 percent in 1994, and the numbers are lower for older retirees.


MORE RETIREMENT-AGE PEOPLE ARE WORKING: it is possible that the decline in coverage would have been even larger had it not been for changes in the work status of individuals eligible for Medicare. In 1995, 59 percent of individuals ages 65–69 considered themselves retired, and that fell to 53.6 percent in 2008, while those saying they were working increased from 28 percent in 1995 to 35 percent in 2008.