December 21, 2006 (The Editor’s Desk is updated each business day.)

Cost of benefits for State and local government employees, September 2006

In September 2006, employer costs for benefits in state and local governments averaged $12.38 per hour and accounted for 32.7 percent of total compensation.

[Chart data—TXT]

Employer costs for insurance benefits averaged $4.18 per hour. The largest component of insurance costs was health insurance, which averaged $4.05, or 10.7 percent of total compensation for state and local government employees.

A major component of benefit costs is paid leave, including vacations, holidays, sick leave, and other leave such as personal leave, military leave, and funeral leave. The average cost for paid leave was $2.98 per hour worked for state and local government employees in September 2006.

The average cost for retirement and savings benefits was $2.68 per hour worked. Included in this amount were employer costs for defined benefit plans, which averaged $2.39 per hour, and defined contribution plans, which averaged 29 cents. Defined benefit plans specify a formula for determining future benefits, while defined contribution plans specify employer contributions but do not guarantee future benefits.

Costs for legally required benefits, including Social Security, Medicare, unemployment insurance (both state and federal), and workers’ compensation, averaged $2.22 per hour worked for state and local government employees.

These data are from the BLS Compensation Cost Trends program. Additional information is available from "Employer Costs for Employee Compensation-September 2006," news release USDL 06-2069.