Cut, Cut, Cut

Unfortunately, reports are flooding in about companies cutting benefits to employees, in addition to cutting employees for companies' benefits. An article in USA Today is rather beneficial to read, as it provides more data points. "Almost half of U.S. employees surveyed by Fidelity predict that benefits such as health insurance, retirement savings plans and pension plans won't be provided by their employer by 2019.Most of that group say they'll be responsible for getting their own benefits. A smaller percentage — 18% — says the government will provide for them.Watson Wyatt says that 62% of employers are very confident they'll offer health care benefits 10 years from now, down sharply from 73% last year. It's the first time in the study's 14-year history that employer confidence declined.Health care costs are rising at about 6% to 7% a year, and "if you put that in the context of a difficult economy, most companies aren't prepared to shoulder all of that burden," says Tom Billet, a Watson Wyatt senior health benefits consultant.He says that employees should get used to picking up more of the tab.In general, the average 401(k) account shriveled 27% in 2008, falling to $50,200 from $69,200 in 2007, according to Fidelity. Without an employer match, workers feel extra savings pressure to shore up their sagging retirement accounts.Dozens of companies have pulled back on retirement contributions, according to the Center for Retirement Research at Boston College. General Motors, Eastman Kodak and Sears Holdings are among them."Traditional pensions in the private sector are on their way out," says Alicia Munnell, director of the retirement research center.Yet, she expects 401(k) matches to come back. Many companies that suspended or reduced their matches after the recession of 2001 reinstated their contributions after the economy rebounded, she says.Less formal perks, such as flexible time off, have taken a hit, as well.Robert Novak, owner of Advanced Deck Designs/ACB Construction in Alexandria, Minn., says he once was flexible with his 12-person staff. Now, he's laid off every worker."If and when I get started again, I will not be able to offer anything (in terms of work perks) for at least three years," he says.More elaborate perks, such as all-expenses-paid vacations awarded to top sales people and the use of a company car, have also been affected.Three-fourths of incentive providers, suppliers to the industry and corporate incentive travel buyers said the economy will have a "negative impact on their ability to plan and implement incentive travel programs," according to a survey taken late last year by the Incentive Research Foundation.

On a separate note, IBM, the big dog, is really biting off all cords and cables with its employees. Its new cutting measure: InformationWeek is reporting that IBM workers who work out of home offices will no longer be reimbursed for Internet access. While this trend may not surprise most of you who already pay for Internet access at home and happen to work there, it's been a longstanding practice at IBM since before the Internet was your source for everything. The new rules go into effect for IBM employees on May 1. From the article (InformationWeek obtained an internal IBM memo): "Today Internet access has become pervasive around the world and in-home Internet contracts have become commonplace along with cable and other telephony services," IBM said in the note, dated March 30. It added that it "remains fully committed to mobility and flexible work arrangements."IBM officials declined to comment, but the move is likely a cost-cutting measure -- and it could mean big savings for the company. Of its 115,000 U.S. workers, about 46,000 are based at what IBM calls "alternative workplaces," a definition that includes home offices. Assuming each worker pays about $30 per month for a broadband connection, IBM stands to save up to $16 million annually from the move in the United States alone.