A GENERATION AGO, WORKERS COULD EXPECT A FULL RANGE OF COMPANY BENEFITS, BUT WITH COSTS RISING AND RETIREMENT ACCOUNTS SHIFTING, HOW ARE YOU GOING TO START ... PIECING TOGETHER YOUR FUTURE?

Byline: Brent Hopkins Staff Writer

The days of workers putting in 30 years and taking home a gold watch, pension and fully paid health care from their employer are all but gone.

Across Southern California, employers faced with double-digit increases in workers' compensation insurance costs and spiraling health care costs have scaled back on or cut out altogether the benefits traditionally associated with a job. Half a century ago, fully paid health care was the norm and even a meat cutter could retire on a comfortable pension. A plethora of manufacturing jobs and a booming economy paved the way for companies to take care of not only the worker, but their family as well, far beyond their retirement day.

< But today's economy rarely prmits such largess. Only 61 percent of companies offer any health benefits, according to a recent Kaiser Family Foundation study, leaving 5 million fewer workers covered than when the study was conducted in 2001. Pensions have largely been supplanted by 401(k) accounts, which offer more flexibility for workers, but the company stops funding once the employee leaves.

While employers bemoan not being able to use benefits as a recruiting tool, experts say that costs have simply risen too high to sustain.

``From what I see, the time has come where companies should no longer be expected to pay 100 percent of employee benefits,'' said Randy Gordon, president and chief executive officer of the Long Beach Area of Chamber of Commerce. ``Some still do, but every year companies are saying look, we think a lot of you and we're going to provide the lion's share, but you're going to have to start paying some, too.''

Employers still pay huge amounts of money on all varieties of benefits, $1 trillion in the last year tracked by the Employee Benefit Research Institute, but the growth rate has slowed in the past two decades. A separate report by the Kaiser Family Foundation and Hewitt Associates examining health care benefits found that only 36 percent of companies extend coverage to retirees, down from 66 percent in 1988. The trend is likely to continue and some experts suggest that in the not-too-distant future few employers will offer retiree health care.

Richard Bank, director of the AFL-CIO's collective bargaining department, called it the ``slow motion erosion of the social contract.'' While the so-called ``Cadillac benefits'' were once available to workers in a broad range of industries in the post-World War II era, they've become increasingly rare.

``It used to be after the war, someone went into a plant, got a job, worked there 30 years,'' Bank said. ``He got his house, sent his kids to college, maybe he got a fishing boat or a place on the lake, but that's not the case any more. There are limited opportunities for someone with just a high school education now.''

Southern California's 60,000 unionized grocery workers found this out when they endured a bruising strike and lockout that ended in February. Though a grocery clerk was once a highly compensated position that enjoyed company-paid health care, the United Food and Commercial Workers union accepted a contract that cut new hires out of the more lucrative benefits.

But with health care benefit costs rising 11.2 percent in the past year, which the Kaiser study found was the fourth straight year of double digit increases, there's little employers can do. While Anita Ron, owner of BrightWorks Inc., a Covina janitorial service, wants to give her 30 employees health care, a $100,000 bill for her workers' comp insurance last year left her with little left in the budget.

``It's ridiculously hard to offer benefits,'' Ron said. ``Those are the things that help you get and retain good employees. I'd love to give them benefits, but with all the fees with workers' comp, I pay more for my insurance, so I can't offer anything.''

Companies in highly competitive, higher margin industries fare a little better. Though she believes a day may come when her workers have to begin chipping in for their health care, Carrie Oliff, director of human resources for Burbank video game developer Insomniac Games, said the company will keep eating rising premium costs. The company's 120 workers enjoy fully paid health care and a 401(k), along with unusual benefits like free lunch on Fridays and a three-day cruise to Ensenada to celebrate the company's tenth anniversary next February.

``Quite frankly, it's a cost of doing business,'' Oliff said. ``We care about our employees, so if I do my job and educate them about the costs and keep them healthy, they'll be at work. If they can't see a doctor, what starts as a cold becomes pneumonia and a hospital stay.''

Retirement spending, which at 46.8 percent of total benefit outlay represents the largest slice of benefit costs according to the EBRI report, used to go entirely to pensions. In the past 15 years, however, companies have increasingly moved to the 401(k) model, which allows workers to divert a portion of their earnings into tax-free investment accounts. The employer then matches a percentage and workers can take it with them from job to job.

Northrop Grumman, which employs 27,500 workers throughout Southern California, including facilities in Azusa, San Bernardino, South Bay and Woodland Hills, is the rare exception. It offers both a pension that allows workers to collect up to 50 percent of their salary rate after retirement and a 401(k) with up to 4 percent matching, as well as paying the standard 80 percent of its workers' health care.

``When you think of what we do, it's often top secret, very sophisticated, challenging work,'' said Maria Norman, the Century City-based aerospace giant's corporate director of benefits strategy and design. ``To have high people turnover is more expensive than it is to provide high level benefits.''

Civil service jobs, long coveted for their benefits, are one of the last bastions of the pension system. But that may not be the case for long, if Assemblyman Keith Richman, R-Granada Hills, gets his way. Concerned that the California will spend $2.6 billion on retirement costs for its employees this year, Richman introduced an amendment to the state constitution Dec. 6 to switch workers to a 401(k) plan.

``The economy now is very different than it was in the 1940s,'' he said. ``Then, individuals stayed with a company for their entire life at times. Now, individuals have a number of jobs during their working career.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

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DWINDLING BENEFITS

Source: U.S. Department of Labor, Bureau of Labor Statistics 

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