Declining Hours Worked.
With nearly all retiree benefit
programs, including the Social Security system, there
are fewer and fewer active employees to help contribute
to providing benefits for retirees. In 1971, there were
approximately nine active employees for each participant
in the Trust. Today, that ratio has dropped to about one
active employee for each two participants in the Trust.
In the early years of the Trust, the hours worked by the
employees of the participating employers were generally
increasing. In the 1977-78 fiscal year, the hours worked
were at a peak of approximately 133 million. Subsequent
to that peak year, the hours worked have been steadily
decreasing. Of course, decreasing numbers of hours
worked means decreasing contributions to the Trust.
In considering contributions to the Trust, the following
figures clearly show the dramatic drop in hours
reported to the Trust.
Plan Years Ending Total Hours Reported
June 30, 1967
113,992,774
June 30, 1970
118,473,220
June 30, 1978
133,119,866
June 30, 1980
123,053,722
June 30, 1985
82,789,816
June 30, 1990
69,065,521
June 30, 1995
53,862,823
June 30, 2000
39,492,748
June 30, 2005
24,495,322
December 31, 2011
20,773,509
In some years, the Trust has seen declines in hours
from one year to the next as high as 10%. However,
hours are likely to remain relatively steady in 2012.
Early Retirees.
Non-Medicare eligible retirees
greatly affect the costs of retiree health benefit
plans. These plans generally pay more for the health
care of early retirees than for retirees with Medicare.
The Trust’s costs have also been continuously
affected by early retirees.
When the Trust began, there were relatively few
participants in the Plan who were under age 65. Coverage
under the Plan was also largely restricted to the payment
limits of Medicare. As pension plans improved, more and
more people began retiring unexpectedly. These early
retirements have put ongoing pressure on the Trust’s
funds. Some years, early retirements accounted for
about 70% of the total number of new retirees who
were being enrolled in the Trust.
General Aging.
The escalation in the numbers of
seniors also contributes to funding issues for the
Trust and other retiree benefit programs, including
Medicare. Participants are now covered by the
Trust’s Plan for longer than ever, with greater health
care needs and expenses.
The cost to the Trust of providing
benefits to a non-Medicare eligible
participant is, on average, more than
five times higher than the cost of
providing benefits to a participant
who is Medicare eligible.
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