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Bureau of Labor Statistics > Employer Costs for Employee Compensation > Home

Planning for the future: Retirement and savings benefits

As the traditional retirement age continues to shift upwards, retirement plans have grown increasingly more relevant. Along with wages and salaries and four other broad benefit categories, the Employer Costs for Employee Compensation (ECEC) measures the employer’s cost of providing retirement benefits for employees.

Different types of retirement and savings benefits

The ECEC breaks down retirement benefits into two categories, defined benefit and defined contribution. Among private industry workers in September 2022, retirement benefits and savings plans accounted for 3.5 percent of total compensation with defined benefit plans accounting for 1.1 percent and defined contribution plans accounting for 2.3 percent. (See chart 1.)

Defined benefit plans- Pension plan providing an employee with guaranteed retirement benefits based on a predetermined formula. A participant’s retirement age, length of service, and preretirement earnings may affect the benefits received.

Defined contribution plans- Retirement plan that specifies the level of employer and employee contributions and places those contributions into individual employee accounts.

Chart 1 data table

Table 1. Percentage of total compensation among ECEC benefits, private workers, September 2022
Benefit type	Percentage
Insurance	7.6
Legally Required benefits	7.5
Paid leave	7.4
Supplemental pay	3.6
Retirement and savings	3.4
Source: U.S. Bureau of Labor Statistics, National Compensation Survey

Retirement benefit cost breakdown

Among private industry workers in September 2022, defined benefit plans cost employers $0.44 per hour worked and defined contribution plans cost $0.91 per hour worked. Among state and local government workers defined benefit plans cost employers $6.85 per hour worked and defined contribution plans cost employers $0.50 per hour worked. (See chart 2.)

Chart 2 data table

Table 2. Private workers vs state and local government retirement benefit costs, September 2022
Retirement type	Private	State and Local government
Defined contribution	$0.91	$0.50
Defined benefit	$0.44	$6.85
Source: U.S. Bureau of Labor Statistics, National Compensation Survey

Among private industry groups in September 2022, the cost per hour worked for defined benefit plans ranged from $0.04 per hour for leisure and hospitality to $1.38 per hour for construction. Cost per hour worked for defined contribution plans ranged from $0.17 per hour for leisure and hospitality to $1.84 per hour for information. (See chart 3.)

Chart 3 data table

Table 3. Cost of compensation for benefit plans by industry group, private workers, September 2022
Industry group	Defined contribution	Defined benefit
Information	$1.84	$0.88
Financial activities	$1.61	$0.31
Manufacturing	$1.11	$0.57
Professional and business services	$1.07	$0.29
Goods producing	$1.07	$0.87
Construction	$0.99	$1.38
Education and health services	$0.97	$0.44
Service providing	$0.88	$0.36
Other services (except public administration)	$0.86	$0.34
Trade, transportation, and utilities	$0.74	$0.48
Leisure and hospitality	$0.17	$0.04
Source: U.S. Bureau of Labor Statistics, National Compensation Survey

Compensation costs for defined benefit plans in the private industry cost $3.00 per hour for union workers and $0.21 per hour for nonunion workers on average. Defined contribution plans cost $1.52 per hour for union workers and $0.85 per hour on average among nonunion workers. (See chart 4.)

Chart 4 data table

Table 4. Cost of compensation for retirement plans by bargaining status, private workers, September 2022
Retirement type	Union	Nonunion
Defined contribution	$1.52	$0.85
Defined benefit	$3.00	$0.21
Source: U.S. Bureau of Labor Statistics, National Compensation Survey

Accessing the data

To assist users in evaluating the reliability of these compensation costs, relative standard errors are also published for each estimate. The standard error for the series is divided by the cost estimate and expressed as a percent of the compensation cost.

ECEC data involving retirement benefits, are available for private industry workers, civilian workers, and state and local government workers from 2004 to the present and will be produced for the March, June, September and December reference periods. ECEC data is available through the public database, as well as in Excel form. The cost of benefits is impacted by worker participation and users can obtain information on incidence and provisions of employer-sponsored benefits in the U.S. through the annual benefits publication, also produced by the National Compensation Survey program.