What employee benefit has been eliminated by many companies in recent years to cut costs?

The elimination of pensions by many companies in recent years is primarily driven by the need to cut costs and manage financial liabilities. Traditional pension plans promise employees a specific monthly benefit upon retirement, which can impose significant long-term financial commitments on employers.

As life expectancy increases and the workforce ages, companies find it increasingly challenging to fund these pensions reliably. Moreover, the unpredictable nature of investment returns can create further financial strain on businesses. To mitigate these financial risks, many organizations have shifted from defined benefit pension plans to defined contribution plans, such as 401(k)s.

This transition helps control costs by transferring more responsibility for retirement savings onto employees. Consequently, the trend of eliminating traditional pension schemes reflects a strategic move by employers to create a more sustainable financial model while still providing employees with benefits to aid their retirement, albeit in a less predictable format than pensions.