Performance Based Benefits

This Business Week article talks about shifting from pension to DB to 401k to (possibly) performance based benefits at the total compensation level (401k + health + salary + vacation time + etc).

Interesting stuff.

The idea of Total Compensation is a popular one these days as employers try to quantify everything they do for employees. The increased focus seems to come from rampant health insurance costs and possible tax ramifications. Remember, the idea of employee-based health care originally came from a way to skirt income tax.

The effect on us, the cubicle workers, is that if employers use this total number, your take home salary will go down as the increased cost of taxes and health care take up a greater percentage of your total compensation.

In the past year many companies have reduced or removed their retirement contributions to employees while simultaneously scaling back the amount they cover on health care. Start tracking what you pay and what your company pays. You may find yourself eventually working, not for a take home salary, but for health care for your family.

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