Data & Research September 9, 2011

Nurses Report a Change in Plans for Retirement

Research from Fidelity shows that while nearly eight in 10 nurses (79%) feel secure about their jobs and their financial future, more than seven in 10 (71%) do not feel they are saving enough for retirement.
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That lack of confidence has risen significantly since 2007, when 57% of nurses felt they were not saving enough.  

Nearly half (49%) of nurses also report their retirement plans have changed because of the economy and ongoing market volatility. More than one-quarter (26%) now plan to retire later than they had originally expected and almost one-quarter (22%) plan to work in retirement when they had not previously planned to do so.  

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In addition, more than four in 10 nurses (42%) believe they will never fully retire. When asked why they will work in retirement, nearly eight in 10 (79%) say they will do so because they will need the income to meet basic living expenses —a significant increase over the 65% of nurses who said so in 2007. More nurses also expect to struggle or just make ends meet in retirement compared to 2007 (28% vs. 18%).   

Despite having to change their retirement plans, nearly half of nurses still believe they are better prepared for retirement, both emotionally (47%) and financially (45%), than workers in other professions.

Nurses Seek Help in Retirement Planning  

Although nurses expressed concerns about retirement in the Fidelity survey, they continue to save for the future. For example, more than eight in 10 nurses (81%) report participating in their workplace savings plan and those who participate say they are saving an average of 9% of their annual salary.  

Despite this high rate of savings, more than half (54%) of nurses say they find retirement planning to be overwhelming and wish they could get some help. When asked about resources they use to learn about and manage their workplace retirement plans, more than four in 10 (43%) say they rely on guidance from a financial professional. One third (33%) also rely on educational materials provided by their employer and nearly one third (31%) rely on online planning tools and calculators.  

Changes Expected  

The study also showed more than half (54%) of nurses “love their jobs and can’t imagine giving them up, even in retirement,” reflecting their commitment to their profession and patient care, despite working in an industry that continues to experience significant change.   

Looking ahead, nearly all nurses (98%) say they anticipate changes in their profession to continue over the next five to 10 years due to recent health care reform, rising costs and the challenging economy. When asked about the specific changes they expect, the majority of nurses identified a shortage of qualified workers (59%), more demanding hours (57%), and more nurses leaving the profession (50%).   

They also expect hospital consolidation to continue -- an activity many say has raised their personal stress levels, lowered morale, and impacted their benefits.
Data & Research September 9, 2011

BLS Releases Comp Cost Data for June

Private industry employers spent an average of $28.13 per hour worked for employee compensation in June 2011, according to the U.S. Department of Labor's Bureau of Labor Statistics.
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Wages and salaries averaged $19.81 per hour worked and accounted for 70.4% of these costs, while benefits averaged $8.32 and accounted for the remaining 29.6%. Total compensation costs for state and local government workers averaged $40.40 per hour worked in June 2011. Total compensation costs for civilian workers, which include private industry and state local government workers, averaged $29.98 per hour worked in June 2011. 

The average costs in private industry for retirement savings benefits were $1.03 per hour worked, or 3.7% of total compensation. Costs varied by occupational group. Private industry retirement and savings benefit costs for management, professional, and related occupations were $2.08 per hour, or 4.1% of total compensation in June 2011. Costs were lowest among service occupations, 22 cents or 1.6% of total compensation. Included in this amount were employer costs for defined benefit and defined contribution plans.  

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In June, the average cost per hour worked for defined benefit plans was 46 cents (1.6% of total compensation). The average cost for defined contribution plans was 57 cents (2% of total compensation).  

Retirement and savings costs were higher, both in amount and as a proportion of total compensation, for union workers ($2.92 and 7.7% of total compensation) than for nonunion workers (83 cents and 3.1% of total compensation). Defined benefit plan costs were significantly higher for union workers ($2.22 and 5.8% of compensation) than for nonunion workers (28 cents and 1% of compensation). Defined contribution costs for union workers were higher (71 cents) compared to nonunion workers (55 cents), but the proportion of total compensation was similar. 

Retirement and savings costs were higher per hour worked in goods-producing industries ($1.70 and 5.1% of total compensation) than in service-providing industries (89 cents and 3.3% of total compensation). Within goods-producing industries, retirement and savings costs averaged $1.71 per hour in construction and $1.57 per hour in manufacturing. Costs in service-providing industries varied widely, ranging from 12 cents in leisure and hospitality to $1.69 in the financial activities industry.  

Retirement and savings costs increased, both in cost per hour worked and proportion of total compensation, with establishment size. Establishments with fewer than 100 workers averaged 61 cents (2.6% of total compensation). Establishments with 100 to 499 workers averaged $1.03 per hour (3.6 percent) worked, significantly less than establishments with 500 workers or more, which averaged $2.18 (5.4% ). Defined benefit costs ranged from 23 cents per hour worked for establishments with under 100 workers to $1.14 per hour worked for 500 workers or more. Defined contribution costs also showed increases by establishment size from 38 cents per hour worked for 1 to 99 workers to $1.04 per hour worked for 500 workers or more.  

Full-time workers in private industry averaged $1.30 per hour worked (4% of total compensation) for retirement and savings, significantly higher than 26 cents for part-time workers (1.6%). 

Private industry employer costs for paid leave (vacation, holiday, sick leave, and personal leave) averaged $1.90 per hour worked (6.7% of total compensation), supplemental pay (overtime and premium, shift differentials, and nonproduction bonuses) averaged 80 cents (2.8%), insurance benefits (life, health, and disability insurance) averaged $2.27 (8.1%), and legally required benefits (Social Security, Medicare, unemployment insurance, and workers’ compensation) averaged $2.33 (8.3%).  

View the entire report at http://www.bls.gov/news.release/pdf/ecec.pdf. 

Tara Cantore

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