EMPLOYEE-SPONSORED PLANS: Rockwell Int’l Scales Back Benefits
Rockwell International Corp. announced Friday that 28,000 nonunion employees and 18,000 retirees will begin paying "as much as 20% of their health premiums" beginning Jan. 1, 2000. The Los Angeles Times reports that the company also "expects to trim the number of health care vendors and options that it offers, which may force workers to change medical plans." The cuts, which will affect up to 5,500 Californians, are expected to save the Costa Mesa-based company as much as $50 million a year by 2002. Ken Furuta, director of benefits planning and financing for Rockwell, said employees were previously paying 8% to 15% of premiums.
Retirees Feeling Pinched
Rockwell's plan for retirees is facing an especially high degree of scrutiny. A union in Iowa may "file a class action lawsuit against Rockwell on behalf of retirees -- even though the union no longer represents these workers." The company insists that its contracts allow it to modify its benefits for retirees just as it does for active employees. "There were some people who were paying nothing or very little for their benefits. There were some people who were paying a lot. We're evening things out," said Furuta. The Times notes that Rockwell is the latest in a long line of companies seeking to modify retiree benefits and that many employees have taken their employers to court over cut benefits. Kirk Maldonado, a benefits attorney in Costa Mesa, said, "There are hundreds of these cases. Unfortunately, the courts have not been uniform on this point" (Huffstutter, 12/12).