Variation of Employee Benefit Costs by Age

How much an employer pays for employee benefits varies widely and depends on the age of the workforce and the structure of the benefits package offered. In general, costs increase for older workforces. The factors driving the differences in cost by age are the time value of money, employee pay, and rates of health care use, disability, and death. Case studies show how the benefit package varies by age in a large traditional company, a large financial services company, and a medium-sized retail company. An illustration is also provided for retirement benefits from two sample plans to show how the benefits are earned over time.