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Rebound? Pay on the rise, but health insurance could lag

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A survey by consulting firm Watson Wyatt indicates more employers are loosening the compensation purse strings, even as employees will probably bear higher health benefits costs.

According to the survey conducted in August, 44% of employers plan to reverse pay cuts made during the economic downturn. That figure is up from 30% just two months earlier. About one-third of respondents said they plan to unfreeze salaries. That’s nearly double the 17% figure from June.

One-quarter of employers plan to restore 401(k) contributions they cut during the downturn sometime during the next six months. Only 5% of employers planned such a move in June.

Employers are still bearish on health benefits. Two-thirds of companies that required more employee contributions to health care said they plan to demand even more in 2010.

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