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Defined Benefit Plan Costs Rise for Plan Sponsors

The U.S. Bureau of Labor Statistics (BLS) released a survey about cost trends for private sector defined benefit plans. The BLS reviewed administrative fees, premiums, and contributions to evaluate access cost in terms of the number of employees covered and the hours worked. In addition, data was broken down by industry. The following table provides a summary of the analysis and changes since 2008:

Average Cost to Plan Sponsors to Provide Access to Defined Benefit Plans
Industry 2008 ($ per employee hour) 2015 ($ per employee hour) Increase (%)
Good Producing 2.73 4.48 64%
Service Producing 1.79 3.00 68%
Financial 1.31 1.19 -9%
Information 2.14 8.00 274%
Trade, Transportation, Utilities 1.77 2.42 37%
Professional and Business Services 2.92 4.07 40%
Educational and Health Services 1.29 2.50 94%
Leisure and Hospitality 0.67 2.67 298%

The survey also found the highest increases in industries with union workers, where access costs as of 2015 average about $4.50 verses industries with non-union workers, with costs about $2.75 per employee hour.

Source: U.S. Bureau of Labor Statistics, “Beyond the Numbers”, February 2016