Research what Canadian companies have been doing in recent years in response to rising post-employment health care costs

Research what Canadian companies have been doing in recent years in response to rising post-employment health care costs and the risks that are associated with defined benefit pension plans. Write a short report on your findings.

The following is a summary of what Canadian companies have been doing in recent years in response to rising post-employment health-care costs and the risks that are associated with defined benefit pension plans.

    (a) Elimination of retiree benefits:

·    The most drastic way.

·    Significant employee discontent is likely.

·    Unilaterally reducing or eliminating post-retirement benefits may prompt retirees and/or active employees to bring an action against the employer.

·    Reserving the right to amend or terminate post-retirement benefits is expressly needed.

·    An employer may consider providing employees with a lump-sum payment in exchange for the elimination or reduction of post-retirement benefits.

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     (b) Stricter eligibility requirements:

·     Imposing more stringent eligibility requirements with respect to new hires will have little impact on an employer’s present bottom line since new hires generally do not reach retirement age for quite some time.

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    (c) Capping of benefits.

    (d) Switching to defined contribution:

·     Employees would be taking on more risk but continue to be protected against catastrophic expenses.

·     Employees could manage their share of the risk by adjusting future contribution and coverage levels to match their personal situation.