Human Capital & Careers

Best of 2009: Employee Benefits

Cost-cutting was the name of the game in 2009, with some basic benefits scaled back or even slashed.
CFO StaffDecember 31, 2009

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Snip, snip, snip. That’s the sound of employee benefits being trimmed, often to save the very jobs of the employees in question, and a sound that was heard almost continuously in 2009. Foundational benefits such as 401(k) matches went out the door in many companies, accompanied by other nice-to-haves such as tuition reimbursement and health-club subsidies, as CFOs danced the delicate line between creating savings and inciting seething.

This constant tension created no small amount of stress for CFOs (“Employee-Benefit Cost Pressures Plague CFOs, Survey Finds“). In January, for example, companies couldn’t turn off corporate contributions to retirement funds fast enough (“Stopping 401(k) Matches: The New No-brainer“), but by July, many problems associated with the strategy had emerged (“Taking Their Lump Sums“). 2009 was also a year to beat back the beast of rising health-care costs (“Prognosis: Negative,” “Will Caterpillar’s Walgreens Deal Shrink Drug Costs?“), even as health-care reform steamed ahead like a locomotive, creating uncertainty about those costs in the future (“All Eyes on Reform“). 

Either ways, smaller nest eggs (“401(k)risis“) likely mean employees who will be much more vigilant about extracting every penny out of what they have left. Several articles documented the growing backlash against employers that may have made some missteps in administrating their 401(k) plans and what penalties they may face (“Fiduciary Liabilities: Are You Covered?“), with regulators getting on the bandwagon as well (“Changes on the Way for Target Date Funds?“).

What’s the best way to survive in this fraught environment? One CFO found an innovative solution to that question: sell the whole firm to employees (“Creating Buyers: The ESOP as Exit Strategy“).