With many company health-care plans in jeopardy due to rising costs, news that the vast majority of senior financial executives believe American companies can't continue providing pensions that adequately cover their employees' retirement will come as a further body blow to millions of U.S. employees.
According to a survey of 3,000 accountants serving as corporate CEOs, CFOs, Controllers and in other executive positions by the American Institute of Certified Public Accountants (AICPA), almost three-quarters don't believe that companies will be able to continue to provide adequate pensions for their employees in the future.
But as more than half (54 per cent) acknowledged, such reductions in pension benefits will pose a real threat to a company's ability to attract and retain the talent they need to compete.
"These findings are a wake-up call," said John Morrow, Vice President of the AICPA's division for CPAs in business and industry.
"The traditional system of rewarding employees with pensions after long years of service is on its way out, because companies simply cannot bear the cost. Therefore, employees will have to find alternate methods of funding their retirement."
Significantly, almost six out of 10 (57 per cent) of those surveyed identified rising healthcare costs as the biggest barrier to a company's ability to offer pension benefits.
Almost a third (30 per cent) also said that pressures to compete in the marketplace outweighed the pressures to provide retirement benefits.
Virtually all the respondents said their companies offer some type of retirement benefit today, with two-thirds offering a 401(k) plan with matching contributions.
Fewer than five per cent said their companies currently offer no retirement plan at all. Unsurprisingly, meanwhile, almost six out of 10 of the CPA surveyed believe that Americans have to educate themselves about retirement savings strategies.
"American workers have to understand the pension safety net will probably not be there for them and that planning for retirement is their personal responsibility" said Carl George, Chair of the AICPA's National CPA Financial Literacy Commission.
"Americans must recognize that unless they take a more active role in their own retirement planning, they may find themselves working far longer than they had intended."