Growing Uneasiness for Retirees : Workplace: Many companies are chipping away at benefits. But analysts say few are expected to follow the drastic action of McDonnell Douglas.

Roland Kay Gaydou, a retired engineer who spent 35 years at McDonnell Douglas, took the news hard last week when the company said it eventually will stop paying for health care benefits for non-union retirees.

The company will tap a surplus in its employees’ pension plan to continue retiree medical coverage only through 1996. Gaydou, who suffers from Parkinson’s disease and a heart condition, and many other McDonnell alumni worry about how they will pay for their prescription drugs and other health care bills after that stopgap program ends.

“I’ll be 77 years old then, and who knows how long I’ll live after that,” Gaydou said. “It came as a shock to me that the company would do something like this.”

Retirees and active employees contemplating retirement at other big companies also have reason to be uneasy about medical care coverage, a prized benefit for many aging Americans. Over the last few years, a wave of corporate giants--including American Airlines, Chrysler and General Motors--have begun efforts to tighten spending on retiree health insurance.

McDonnell Douglas’ action is unusually severe, experts say, and they expect few other companies to stop paying for health insurance coverage for people who have already retired. Still, prodded by an accounting rule change, big employers that have provided generous coverage are looking for ways to bring those expenses under control.

“Many employers are investigating the whole package (of benefits) and saying, ‘My gosh, we were spending too much,’ ” said Patricia Wilson, an expert on retiree medical care for the consulting firm Foster Higgins.

A third of America’s retirees depend on their former employers to provide health care benefits, according to recent government reports. But of 1,380 employers recently surveyed by Foster Higgins, 65% have either revamped their retiree health care over the last two years or plan to by year-end, mainly to curb costs.

Increasingly, employers are requiring retirees to pay more out of their own pockets for health coverage. They are also tightening eligibility standards to limit the number of covered retirees. Less than 2%, however, have eliminated coverage for current retirees or plan to cut off coverage for them by year-end.

At General Motors, for instance, many non-union retirees face higher charges for deductibles and increased co-payments on their health insurance. American Airlines is requiring active employees to contribute to a special fund if they want health insurance upon retirement and is also tightening its caps on lifetime benefits.

Defense contractors, including McDonnell, are in a unique position because they are allowed under federal regulations to pass the cost of retiree health care onto the government by including it in their overhead charges on contracts.

As a result, most aerospace contractors have been generous in providing health care benefits that supplement Medicare for retirees. A survey of major prime contractors indicated that none was planning to follow McDonnell’s lead.

“We feel it is important to provide an appropriate level of protection for Lockheed retirees,” said Lockheed’s vice president for human resources, Robert Corlett. “One step we have taken this year is to create a new funding mechanism to allow the company to set aside funds so that, when a person retires, the money will already be there to provide the coverage.”

But McDonnell will stop paying for retiree coverage. To provide health benefits over the next four years for each of its 20,000 retirees, the company elected to dip into its pension surplus.

McDonnell said it remains committed to its retirees’ health care and is adamant that retirees will continue to get some kind of health coverage. The company points, for example, to the possibility of a national health care program.

McDonnell’s financial condition compelled it to do something extreme, securities analysts said. Under new accounting rules that require all corporations to carry retiree health care costs on their books, the St. Louis-based firm would have been forced to take a $1.2-billion to $1.8-billion financial write-off no later than next year.

A write-off of that magnitude would have wiped out half of its shareholder equity, creating serious problems in future years, when the company would seek to borrow money or roll over existing loans, experts said.

“They had to keep the charge low enough so they would not violate their loan covenants,” Prudential Securities analyst Paul Nisbet said. “They had to consider everything up to eliminating health care benefits.”

Although many retirees are alarmed by the news, some were prepared for cutbacks.

“I know (Chairman and Chief Executive) John McDonnell is doing everything he can to keep the company afloat,” said James E. Fergus, a retired engineer who spent 44 years at the firm. “I am sure there are going to be some lawsuits, but I wouldn’t sue the company. We retirees have been treated really well. We can’t base our life today on what conditions were 10 years ago.”

Consultant Wilson argued that most companies, out of a sense of loyalty, resist reducing retiree benefits.

But she said such cutbacks “are not unconscionable” because of the affluence of many retirees.

“These retirees are the most affluent segment of the population, and it’s not inappropriate for them to pay” for part of their medical coverage, Wilson said.

That is particularly true, experts say, for retirees over age 65 who are covered by Medicare and who can buy supplemental insurance to further cover their expenses.

Still, there are various reasons why few companies are expected to take an action as drastic as McDonnell Douglas’. For one thing, not all employers can legally take such an action.

Courts have held that employers can’t break a promise to provide lifetime health benefits. A bid by Navistar International to reduce its retiree medical expenses, for instance, has been held up by a union legal challenge.

Many employers may shy away from eliminating retiree benefits because it would undermine another corporate cost-cutting maneuver: early retirement programs. Candidates for early retirement might decide they can’t afford to leave their jobs if their medical insurance isn’t covered, said William S. Custer, research director for the Employee Benefit Research Institute, a nonprofit group in Washington.

Moreover, Custer said, retiree health insurance has helped companies over the years attract and keep good employees.

Eliminating it, he said, would hurt morale.

“If you renege on that promise, then the thinking among employees becomes, ‘Wait a minute. If they renege on this promise because of the costs, what are they going to do about their other promises?’ ” Custer said.