After World War II, corporations seemed to caretakers of their employees, providing guaranteed employment, free health care and retirement pensions. As the economy was growing rapidly, companies could afford to do this in order to attract the best employees.
However, in the past 20 years, competitive market forces and slower growth have caused many corporations to reduce some of these benefits, because they weren't sustainable. During that time, guaranteed employment, free health care, and retirement pensions were replaced with corporate downsizing, contributions to health care, and defined contribution retirement funds.
Just about every person I know has experienced major changes to their benefits. During the time I worked, my company began downsizing, and started charging for health insurance. The only thing that remained the same was our retirement plan, since the company always had a defined contribution plan, not a pension.
I expect it will continue to change, due to global competition. I hope that a stable solution is found by the time my daughter starts working.
For more on Reflections and Musings, check back every Saturday for a new segment.
This is not financial advice. Please consult a professional advisor.
Copyright © 2008 Achievement Catalyst, LLC
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2 comments:
The best solution I've come across to solve the benefits crisis for my children (it is too late for me) is at this site:
http://www.fundadvice.com/fehtml/parents/9408.html
There are definately concerns but implementing something like this would take off quite a bit of pressure.
I'm not a customer of theirs (yet), but am considering hiring them on to help out the family in case something ever happens to me.
All the more reason why our kids should be taught sensible personal financial management.
My 2 eldest girls have just started working and this is exactly what I am working on.
Regards
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