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Getting the benefits from benefits May 2011

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Half day interactive open workshop in Toronto on employee benefits.

Half day interactive open workshop in Toronto on employee benefits.

Published in: Business, Economy & Finance

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  • 1. Getting the benefit from benefits
    by Toronto Training and HR
    May 2011
  • 2. Contents
    3-4 Introduction to Toronto Training and HR
    5-6 Why have an employee benefits plan
    7-8 Most common employee benefits provided
    9-14 What is typical?
    15-21 Critical illness insurance
    22-24 Employee assistance programs
    25-26 Drill
    27-30 Retirement plans
    31-36 What do people REALLY think about pensions?
    37-38 Ethical pensions
    39-44 Outsourcing benefits
    45-48 Overtime…for managers?
    49-50 Benefits communication
    51-52 Selecting a benefits provider
    53-54Making benefits effective
    55-58 Case studies
    59-60 Conclusion and questions
    Page 2
  • 3. Page 3
    Introduction
  • 4. Page 4
    Introduction to Toronto Training and HR
    Toronto Training and HRis a specialist training and human resources consultancy headed by Timothy Holden
    10 years in banking
    10 years in training and human resources
    Freelance practitioner since 2006
    The core services provided by Toronto Training and HR are:
    • Training course design
    • 5. Training course delivery
    - Reducing costs
    • Saving time
    • 6. Improving employee engagement & morale
    • 7. Services for job seekers
  • Page 5
    Why have an employee benefits plan?
  • 8. Page 6
    Why have an employee benefit plan?
    EMPLOYERS PROVIDE BENEFITS TO EMPLOYEES:
    Comply with provincial and government regulations
    Motivate and support existing workers, particularly the high-performers that are important to retain
    Help attract new employees
    Strengthen the long-term commitment of employees to the organization
    Reduce stress associated with health and financial difficulties
    Improve the mental and physical health of employees
  • 9. Page 7
    Most common employee benefits provided
  • 10. Page 8
    Most common employee benefits provided
    Medical insurance
    Dental insurance
    Vision care
    Group-term life insurance
    Disability insurance
    Critical illness
    Employee assistance plan
  • 11. Page 9
    What is typical…medical insurance
  • 12. Page 10
    What is typical…medical insurance
    Prescription or prescribed drugs
    Prescription eye glasses
    Contact lenses
    Professional services and paramedical practitioners
    Semi-private hospital room
    Out of province and out of country hospital and medical expenses
    Ambulance, lab charges
    Hearing aids
    Medical supplies
    Prosthetics, appliances and medical equipment
  • 13. Page 11
    What is typical…dental insurance
  • 14. Page 12
    What is typical…dental insurance
    Diagnostic and preventative treatment
    Minor restorative treatments
    Major restorative treatments
    Orthodontics
  • 15. Page 14
    What is typical…vision care
  • 16. Page 6
    What is typical…vision care
    Prescription eye glasses
    Contact lenses
    Laser eye surgery
  • 17. Page 15
    Critical illness insurance
  • 18. Page 16
    Critical illness insurance 1 of 6
    WHY IS IT IMPORTANT?
    Disability insurance replaces income but is insufficient for the added burden of medical expenses
    Group health coverage has restrictive limitation and maximums
    Social medical care is eroding and cannot be relied upon
    Personal and retirement savings have intended purposes other than medical expenses
    Most critical illness victims make a full recovery after a lengthy expensive treatment period
  • 19. Page 17
    Critical illness insurance 2 of 6
    CANADIAN STATISTICS
    1 in 2 will contract heart disease
    1 in 2 heart attack victims are under age 65
    1 in 3 will develop some form of life threatening cancer
    1 in 4 currently suffer from cardiovascular disease
    70% of open heart surgery operations each year are coronary bypasses
    1 in 4 will suffer kidney failure
    1 in 20 run the risk of having a stroke before age 70
    1 in 500 people will suffer from multiple sclerosis
  • 20. Page 18
    Critical illness insurance 3 of 6
    CANADIAN STATISTICS
    Heart attack, cancer and stroke are the three most common diseases
    1 in 4 will contract cancer or heart disease before they retire
    Two-thirds of the cost of cancer treatment is not covered by provincial medical plans
    30% of cancer victims are completely cured
    75% of stroke victims survive the initial occurrence
    95% of heart attack victims survive the initial occurrence
  • 21. Page 19
    Critical illness insurance 4 of 6
    CONDITIONS THAT COULD BE COVERED
    Cancer (life-threatening)
    Heart attack stroke (cerebrovascular incident)
    Coronary artery by-pass surgery
    Multiple sclerosis
    Kidney failure (end-stage renal disease)
    Major organ transplant
    Paralysis (two or more limbs)
  • 22. Page 20
    Critical illness insurance 5 of 6
    CONDITIONS THAT COULD BE COVERED
    Deafness
    Blindness
    Parkinson’s Disease
    Alzheimer’s Disease
    Motor Neurone Disease
    Permanent total disability
    Severe burns
  • 23. Page 21
    Critical illness insurance 6 of 6
    WHAT TO LOOK FOR IN CRITICAL ILLNESS COVERAGE
    Clear definitions (medical terminology)
    No restrictions at the time of claim, for instance HIV exclusions
    Comprehensive scope of coverage
    Lump sum benefit payment for claims
  • 24. Page 22
    Employee assistance programs
  • 25. Page 23
    Employee assistance programs 1 of 2
    Absenteeism
    Productivity
    Attrition
    Disability
  • 26. Page 24
    Employee assistance programs 2 of 2
    FEATURES TO LOOK FOR
    Direct access
    Quick response
    Professional
    Confidentiality
    Off site
    Direct treatment
    Appropriate coverage
  • 27. Page 25
    Drill
  • 28. Page 26
    Drill
  • 29. Page 27
    Retirement plans
  • 30. Page 28
    Retirement plans 1 of 3
    DEFINED BENEFITS PLANS
    Advantages
    Disadvantages
    DEFINED CONTRIBUTIONS PLANS
    Advantages
    Disadvantages
    GROUP REGISTERED RETIREMENT SAVINGS PLANS
    Advantages
    Disadvantages
  • 31. Page 29
    Retirement plans 2 of 3
    WHICH PLAN IS BEST FOR OUR ORGANIZATION?
    Amount to spend
    Internal resources and people available to manage and administer the plan
    Risk of guaranteeing a set pension (Defined Benefit) or leaving the responsibility for the performance of the retirement funds (Defined Contribution)
  • 32. Page 30
    Retirement plans 3 of 3
    POINTS TO REMEMBER
    Changes in life expectancy, the economic downturn and mobility in the labour market have contributed to the shift from defined benefit (DB) to defined contribution (DC) schemes
    Many employees perceive DB plans to be of greater value than DC, but this is not necessarily so-low DB accrual rates may produce a lower return than good contribution levels to a DC plan
    Employers should clearly explain the good points of moving to a DC plan, such as the employer contributions
  • 33. Page 31
    What do people REALLY think about pensions?
  • 34. Page 32
    What do people REALLY think about pensions? 1 of 5
    It is a valuable recruitment tool
    It is a valuable retention tool
    As an organization, they feel responsible for employees‘ long-term financial wellbeing
    There is too much regulation involved in running a pension scheme
    They have to offer a pension scheme because competitors do
  • 35. Page 33
    What do people REALLY think about pensions? 2 of 5
    Pension schemes have become too expensive to run
    Pensions are the benefit that most employees want above all other benefits
    Employees have lost trust in employer-provided pension schemes
    Most employees would prefer to forgo the pension scheme and have more basic pay
  • 36. Page 34
    What do people REALLY think about pensions? 3 of 5
    REASONS PEOPLE DON’T JOIN
    Affordability
    Other financial demands and interests
    Apathy/inaction
    Lack of understanding about pensions generally
    Lack of interest
    Lack of awareness about pensions
    Lack of trust in pensions
    Not seen as a good investment
  • 37. Page 35
    What do people REALLY think about pensions? 4 of 5
    ENSURING PEOPLE HAVE AN ADEQUATE PENSION IN RETIREMENT
    Actively encourage pension scheme membership
    Ensure employer contributions are adequate
    Actively encourage employees to make adequate contributions
    Proactively educate employees on pensions
    Offer access to independent financial advice
    Include pensions as part of total reward statements
    Operate compulsory minimum contributions for employer and employees
  • 38. Page 36
    What do people REALLY think about pensions? 5 of 5
    MEASURING RETURN ON INVESTMENT
    No action taken
    By looking at pension scheme take-up
    By including it in a staff satisfaction survey
    By looking at retention
    By looking at recruitment
    By including it in a staff engagement survey
    They do not but plan to in the future
  • 39. Page 37
    Ethical pensions
  • 40. Page 38
    Ethical pensions
    Ethical investment funds enable people to invest pension contributions in companies that have ethical practices
    More employers are offering an ethical pension fund option
    A fund can actively seek to invest in organizations considered to be ethical, or screen out those considered to be involved in unethical activities
    Positive criteria include environmental conservation, equal opportunities and animal welfare. Negative criteria can include health and safety breaches, poor relations with employees and customers, and nuclear power
  • 41. Page 39
    Outsourcing benefits
  • 42. Page 40
    Outsourcing benefits 1 of 5
    COSTS GETTING REDUCED
    Maturing industry
    Increased competition
    Offshoring
    COST OF INTERNAL ADMINISTRATION
    Internal administrative people
    IT expenses
  • 43. Page 41
    Outsourcing benefits 2 of 5
    RISK CONSIDERATIONS
    Maturing industry
    Increased competition
    Offshoring
    COST OF INTERNAL ADMINISTRATION
    Staffing risk
    Systems risk
    Database risk
    Error risk
  • 44. Page 42
    Outsourcing benefits 3 of 5
    ADMINISTRATION OPTIONS
    Online sites providing access to tools and resources
    Expanded capacity to ensure consistent service
    CHALLENGES TO INTERNAL BENEFITS ADMINISTRATION
    Plan design and security changes that impact administration requirements
    New employer groups or plans added through acquisition
    High transaction volumes driven by a reduction
    in force or location closure
    Administrative changes driven by new legislative or regulatory compliance
  • 45. Page 43
    Outsourcing benefits 4 of 5
    IS OUTSOURCING RIGHT FOR YOUR ORGANIZATION?
    Employee numbers are limited, so they struggle to keep up during annual enrolment or when other new changes are implemented
    One or two people on the HR team hold much of the historical knowledge
    The system (or worksheet) currently used is out
    of date and difficult to modify
    It’s difficult to get support from the IT department
    Records are not centralized—some in paper files,
    some in other databases
  • 46. Page 44
    Outsourcing benefits 5 of 5
    IS OUTSOURCING RIGHT FOR YOUR ORGANIZATION?
    The organization struggles to keep administration
    consistent with the most recent law changes
    Calculation or administration errors have led to costly legal settlements
    It is desirable for employees to have online tools so they could model their own pension estimates instead of calling HR
    Employees can’t get daily work done because of participant calls
  • 47. Page 45
    Overtime…for managers?
  • 48. Page 46
    Overtime…for managers? 1 of 3
    Supervision of other employees
    Role in running the organization
    How much the individual earns
  • 49. Page 47
    Overtime…for managers? 2 of 3
    IN SUMMARY-employees may still have a right to receive overtime even if they’re considered managers under the employment standards laws if:
    they’re covered by the mandatory overtime provisions of the employment standards law; and/or
    overtime is required under the terms of the employment contract or collective agreement.
    Consider not just what the employment
    standards law says but what the contract requires
  • 50. Page 48
    Overtime…for managers? 3 of 3
    POSITION IN ONTARIO
    Person “whose only work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis” exempt from overtime; and
    regulations don’t define “supervisory or managerial” (Exemptions, Special Rules & Est. of Minimum Wage Reg., Sec. 8(b)).
  • 51. Page 49
    Benefits communication
  • 52. Page 50
    Benefits communication
    Old approach
    New approach
    People get distracted and forget; repetition, across time, is vital
    Targeting fuels motivation and improves outcomes
    Wants are more important than needs
    Your “hero” is the customer, not the plan or program
  • 53. Page 51
    Selecting a benefits provider
  • 54. Page 52
    Selecting a benefits provider
    AT THE MEETING
    Assess your organization and needs so that they can recommend an appropriate benefits structure
    Explain in detail the costs, detailed benefits and admin options available
    Help you to implement the benefits plan
  • 55. Page 53
    Making benefits effective
  • 56. Page 54
    Making benefits effective
    Consider your objectives
    Tune into employees
    Agree your main message
    Develop a strong campaign concept
    Make it personal
    Communicate clearly and concisely
    Ensure data is up to
    Build momentum and launch with a bang!
    Follow up and send reminders
  • 57. Page 55
    Case study A
  • 58. Page 56
    Case study A
  • 59. Page 57
    Case study B-Oracle
  • 60. Page 58
    Case study B
  • 61. Page 59
    Conclusion & Questions
  • 62. Page 60
    Conclusion
    Summary
    Questions

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