NU Online News Service, June 9, 2004, 4:16 p.m. EDT, Washington – Employers, workers and the government must work together to save the U.S. employee benefit system.[@@]

The American Benefits Council, Washington, an employer group, makes that plea in a new report about the financing problems that cloud the horizon for almost every type of major employee benefit.

“Without decisive action, our nation’s already seriously troubled health and retirement systems are headed for a major crisis,” says James Klein, the council’s president.

The council’s report presents a 10-year plan for benefit system reform.

In a section about retirement income, the council says tax incentives and other incentives should encourage employers and employees to contribute enough to retirement plans to help employees maintain their living standards when they retire.

The council also calls for improvements in financial literacy.

By 2014, most households should have access to investment education and advice, 75% of households should have estimated their retirement savings needs, and 74% of private-sector employees should be participating in workplace retirement plans, the council says.

The council is hoping that, by 2014, the personal savings rate will reach 15% of disposable income.

The council also recommends major efforts to overhaul the U.S. employee health coverage system to broaden coverage and empower consumers. Consumers need more information about health care outcomes, the council says.

To promote health security for future retirees, the government must modernize Medicare and provide more comprehensive Medicare benefits, the council says.

Congress also should establish tax incentives to encourage employees to prepare for retiree health and long term care costs and to encourage employers to offer long term care benefits and pre-fund retiree health benefit programs, the benefits council says.