(MONEY Magazine) – It's a do-it-yourself world. And when it comes to your employee-benefits plan, the new mantra is "Give me more choices, and let me manage them myself, thank you very much." After years of choosing health plans from a cafeteria menu of offerings, U.S. workers are demanding more say in a wider array of their corporate benefits--and faced with a tight employment market, many companies are complying--What's at issue here is not concierge services or casual Fridays but programs with real financial value--benefits that directly or indirectly put more money in your pocket.

To find out what's new and what's hot on the benefits front, we polled the trend-setters--America's largest corporations. We surveyed the Fortune 100 corporations about what they offer their nonunion staffers in four key areas: retirement plans--including profit sharing--health care, stock options and both life and long-term-disability insurance. The 40 companies that completed our comprehensive questionnaire represent nearly two dozen industries and more than 3 million workers and their families. This research uncovered four major trends:

--Most new corporate benefits are designed to appeal to younger workers, job hoppers and employees who are willing to take charge of their own plans.

--Current benefits packages emphasize offerings that are likely to be cheaper and easier for employers to manage than are traditional pension and health plans.

--Employees will be expected to kick in even more of their own money to fund their retirement and health care.

--The good news, especially for MONEY readers, is that better 401(k) investment choices and the move to grant stock options to workers at all levels are sweetening benefits packages across corporate America.

"When you factor in stock options and tax-deferred savings through 401(k) plans, employees of Fortune 100 companies could easily retire rich," says Martha Priddy Patterson, director of employee-benefits policy and analysis at KPMG in Washington, D.C., "but only if they take full advantage of what's offered and learn how to manage these benefits in a smart way."

Based on our survey, we compiled MONEY magazine's sixth ranking (since 1991) of America's Best Company Benefits. On pages 118 and 119, we showcase the 10 companies with the most generous packages for a baby boomer. Rankings and key benefits of the 30 other companies that responded to our poll begin below and continue on pages 122 and 125.

The No. 1 firm: New York-based tobacco giant Philip Morris, thanks to a particularly generous profit-sharing program that gives employees a contribution of 13% to 15% of pay, along with low-cost health-care plans for families. (For other top profit sharers, see page 122.)

Surprisingly, our No. 4 company, after Procter & Gamble and Xerox, comes from the ranks of high-tech companies, which are known for their generous stock options and relatively few other core benefits. Intel, however, provides its employees both profit sharing, at 12.5% of salary, and company-funded pensions.

A few words on our rankings: Since MONEY readers tend to be prodigious savers and investors, the benefits experts we consulted advised us to give the greatest weight to the retirement segment of the survey. A 1999 retirement-confidence survey of 1,000 people by the Employee Benefit Research Institute found that one-third of workers are counting on retirement plans to provide their primary source of income in their later years. The second most important component of our ranking was health care. The last time we looked at corporate benefits, in 1996, health care was the biggest issue; employees then were balking at the new, restrictive managed-care options in their health plans. These days half of large employers offer a fee-for-service (or indemnity) plan as well as a wider choice of managed-care programs.

Here are details on the major developments in today's benefits landscape.

RETIREMENT

More corporate powerhouses--including Boeing (No. 8 in our ranking), AT&T (No. 15), Aetna (No. 19) and IBM (No. 24)--are trading in traditional pensions that reward employees for their loyalty in favor of controversial cash-balance plans that let younger workers accrue benefits earlier in their careers. Other firms are dropping pensions altogether. Last year, 77% of large employers polled by Hewitt Associates provided a pension plan, compared with 85% eight years earlier.

--TRADITIONAL VS. CASH-BALANCE PENSIONS. Although cash-balance pensions are employer-funded, they are cheaper for companies to administer than traditional pensions. In a traditional plan, benefits are based on an employee's age, salary and years of service. This formula favors older employees in their peak earning years with many years of service. In most companies, these benefits are not available until the worker reaches retirement age.

Under cash-balance plans, employers generally contribute a fixed amount (typically 4% to 5% of pay) each year for every worker. Young job hoppers, who according to an Arthur Andersen study are expected to hold between seven and 12 jobs in their working lives, can take some or all of their vested benefits with them in a lump sum or roll the money over into an IRA when they move on. These plans also let staffers track the value in their own "hypothetical" accounts.

Soon-to-be-retirees, however, are concerned--and rightly so--that being switched to a cash-balance plan late in their careers will reduce their ultimate retirement payout. In fact, after AT&T introduced its new cash-balance pension last year, more than 15,000 managers accepted an early-retirement deal when they learned they'd have to work several more years before they would accrue any additional benefits. To counter this problem, some recent cash-balance converts are "grandfathering" older workers, allowing them, for example, to continue to accrue benefits under the former plan's terms.

--401(K)S ARE MORE POPULAR THAN EVER. Nearly all of the firms (99%) that were polled in the Hewitt study offered a 401(k) or other defined-contribution plan, with the large majority of those firms matching workers' contributions. (All but a handful of the 40 companies that answered the MONEY poll match 401(k) contributions.) Indeed, this feature has become so popular that respondents to a recent Society for Human Resource Management survey name their companies' matching programs as the incentive they most often use to reel in hot prospects, from executives to line workers.

Hewitt also reports that, on average, employers like mortgage purchaser Freddie Mac (No. 13) now offer eight investment choices, from aggressive diversified equity funds to conservative money-market funds. Four years ago, the norm was six options. Of more than 30 million 401(k) participants in the U.S., the average account balance is nearly $40,000; 10% top $100,000.

Over the next few years, the ranks of 401(k) participants should get quite a boost, thanks to a June 1998 ruling by the Internal Revenue Service that will allow employers to automatically enroll newly eligible employees in their plans. Says KPMG's Martha Priddy Patterson: "It's one of the best things to happen to retirement policy since ERISA" (the 1974 law that requires employers to properly fund retirement plans). Unless the employee opts out of the 401(k), a company can withhold 3% of the employee's pay and invest it in a balanced fund, often with a company match of 50% to 100%. Companies that make automatic contributions on behalf of their employees report that only 10% opt out; the participation rate for all 401(k)s is just 67%.

HEALTH-CARE PLANS

Heeding workers' interest in more flexibility and the freedom to make more of their own health-care decisions, some companies are now supplementing their health maintenance organization (HMO) offerings with point-of-service (POS) plans and preferred-provider organizations (PPOs), which each allow participants to go to doctors outside the managed-care network.

--COMPANIES ARE OFFERING COST-CUTTING INCENTIVES. To encourage employees to choose cheaper plans, employers like TIAA-CREF (No. 5) have set a fixed amount that the company will contribute for each plan. For instance, if an employee opts for the PPO (which runs $876 a month at TIAA-CREF), the financial services firm will pay $730; the employee picks up the difference. On the other hand, TIAA-CREF will pay $662 a month for an HMO, which costs only $572. That $90 difference will show up in the employee's paycheck. (For the list of companies where employees pay the lowest premiums for a family of four, see page 120.) Whether this practice is good or bad for employees depends both on their particular needs and on the design of the plan--which is not always easy to figure out.

--RETIREES WILL PAY MORE. As employers confront the aging baby-boomer population, they are reining in retirees' health benefits. More companies are imposing new minimum age and service requirements for subsidized coverage or denying health benefits for future retirees altogether. Even current retirees are being asked to pick up more, if not all, of the tab for their health-care premiums at group rates, says Paul Ginsburg, president of the Center for Studying Health System Change. In some instances, employers are doling out lump sums and leaving it up to retirees to buy their own health insurance.

--COMPANIES ARE MONITORING THE QUALITY OF PLANS. The good news in health care for employees is that more companies are seriously reviewing standardized quality ratings by groups like the National Committee for Quality Assurance (NCQA) when selecting which HMOs to offer. (Ratings on PPOs will be offered in 2000.) A few firms, including General Motors (No. 14), are posting this data to help workers make more informed choices.

STOCK-OPTION PLANS

Right now the talk is all tech when it comes to lucrative stock options, but not for long. Over the past few years more old-line corporations across industries that range from banking to consumer products to automobiles are doling out these highly prized perks to employees from the mail room to the board room.

--OPTIONS ARE NO LONGER EXCLUSIVELY AN EXECUTIVE PERK. Blame the madness on IPO mania. Just a few years ago, only the corporate elite counted stock options as core elements in their compensation packages. These days, college seniors are negotiating options with campus recruiters. Responding to the threat that stars will be lured away by anything Internet, corporate America is moving to grant options to lower-ranking staffers. According to a June 1999 survey of 350 large U.S. companies by William M. Mercer, 17% are granting options to 50% or more of their staffs. That's up from only 6% in 1993. Of the 40 companies in our survey, Procter & Gamble (No. 2), AT&T (No. 15), General Electric (No. 22), Chase Manhattan (No. 31) and eight others award options to employees at all levels. (See the complete listing at left.)

Eligible employees stand to gain a lot. According to the National Center for Employee Ownership (NCEO), a nonprofit research firm in Oakland that studies stock-option and purchase plans, in 1998 the average value of stock options granted to professional and technical workers was $37,000 and $41,000, respectively. (NCEO defines average value as the number of options granted times the market value of the shares on the date of the grant.) Even administrative employees received a respectable average of $12,500 worth of options. By exercising these options, workers can boost their compensation by 10% to 12% on average. Why the sudden generosity? Stock options are a relatively low-cost, flexible add-on, since the employer determines how many shares to offer and who'll get them. "For that reason they fit in well with the established structure of the benefits companies already have," says Ed Carberry, a spokesman for NCEO.

--THE DOWNSIDE OF OPTIONS. Although stories of soaring stock options are what make them so appealing, the reality is that they aren't worth anything if the stock falls below the option price or if they are never exercised. Carberry claims that the corporate landscape is littered with other options stories about people who squandered tens of thousands of dollars by letting their options expire. Many didn't realize that they could have exercised their options in a cashless transaction and thought they couldn't afford to purchase their shares. Unfortunately, most employers are not doing enough to help workers, particularly those at lower levels, understand how to manage options. So far, less than a third of companies offering options to more than half of their employees distribute comprehensive educational information to their staffs.

MORE CHOICES, AT A PRICE

To make smart decisions about stock options and any other benefits that offer choice and greater flexibility, you'll need to hunker down and study your investment options, health-plan descriptions and insurance policies--an activity that doesn't come naturally to most of us. A recent survey by Consumer Action and Yankelovich Partners revealed that only 17% of Americans spend more than an hour reading their health-plan manuals and less than half read the materials closely. To their credit, employers are finding new ways to deliver benefits details and advice to overwhelmed workers. For instance, Forrester Research reports that 62% of corporations are looking into offering individual portfolio recommendations online; 17% would use online financial advisers.

Some big companies are considering contracting with Internet-based financial advisory firms like 401(k) Forum in San Francisco or Financial Engines in Palo Alto to provide customized asset-allocation advice to participants in 401(k) plans. Employees enter details about their age, current contributions, salary, anticipated retirement age and income into a personal account and the online adviser responds with a forecast of the likelihood (say, 60%) that the investors will reach their retirement goals. The financial advisory service will also provide investment recommendations based on the individual's own risk tolerance and goals.

So, okay, benefits education may not be as sexy as the lifestyle incentives some companies are offering. But if the advice helps you retire rich, that beats on-site massages anytime.

REPORTER ASSOCIATES: KYRA ALFORD, JOAN CAPLIN, ETHAN JOHNSON, DAVID KUHN, ELYSSA LEE, BRIAN P. MURPHY, BROOK C. WILKINSON