Getting the benefits from benefits May 2011


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Half day interactive open workshop in Toronto on employee benefits.

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Getting the benefits from benefits May 2011

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