Attracting staff benefits and compensation

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What can you do to attract, retain and motivate staff?

How to reduce costs?

Defined pension plans are not dead for your high earners, find out how.

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  • Thanks Mekke, as employers struggle finding competent staff, the issues of workplace wellness and staff morale come to the fore. Some organizations never have to worry about recruiting. Employees spread the word and people are lined up to work there. Once hired, effective programs to retain, reward and motivate staff, then become important.
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  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc   • Insurance and disability benefits: an overview and explanation   • Filing claims, benefits packages, disability claims: where does the money go? How can your employees access it?   • How to answer your employees’ claims questions   • Salary surveys that work   • Retirement plan options: group RRSP vs. defined benefits pensions
  • Introduction to Employee Benefits CG Hylton & Associates Inc   • Insurance and disability benefits: an overview and explanation   • Filing claims, benefits packages, disability claims: where does the money go? How can your employees access it?   • How to answer your employees’ claims questions   • Salary surveys that work   • Retirement plan options: group RRSP vs. defined benefits pensions
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • An IPP is a defined benefit pension plan and unlike the RRSP it sets your monthly income at retirement.   Covered earnings for pension plan purposes are up to $134,834 in 2013 dollars. An IPP permits the accumulation of greater assets, up to 65% more than an RRSP.   Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Blue is IPP Past Service Yellow is IPP current service White is RSP Service Max in 2013 is $23,820 Introduction to Employee Benefits CG Hylton & Associates Inc
  • Attracting staff benefits and compensation

    1. 1. 1Attracting Staff –Compensation & Benefitsin Competitive TimesChris HyltonCG Hylton & Inc.info@hylton.ca Tel 800 449-5866Travel Alberta, CamroseMarch 31 3:30 - 4:30
    2. 2. 21. Creating a Compensation Plan2. What is actually meant by"benefits and pension plans"3. HR Strategies that work4. RSP and pension plans
    3. 3. 3Chris Hylton is a benefits broker andHR consultant. He will be talkingabout how to set up benefits andpension plans that will help attract andretain employees. How to deal withseasonal employees. New ways ofintroducing flexibility into your plans,and the advantages of RSP’s orpensions for staff and owners.
    4. 4. 4He will also touch on HR strategies thatyou can use to make your organization anemployer of choice, even if you don’t havethe resources to pay top dollar in a hot jobmarket.
    5. 5. 51. Creating a Compensation PlanCompensation is an exchange of moneyor something of value for workdeliveredThere are many methods ofcompensation for staffRegardless of the method used,customizing the Plan to fit yourorganization is a must
    6. 6. 6How Do I Customize a Plan?To Customize you need to: Know what your mission is Know what is important toyour organizations success Know what kind of cultureyou have or want topromote Make sure the budget iscapable & use the staff forthis
    7. 7. 7Without this link, you may have:A conflict between you goals andcompensationNo compensation for things that contributeto the organizations success and visa-versaNo compensation for desired behaviors andvisa-versa
    8. 8. 8Therefore, you need to develop aCompensation PhilosophyCompensation philosophy means :• You can see a clear linkage betweenthe organization’s mission, goals, anddesired behaviours and thecompensation system• You know where you want yoursalaries to be in relation to the market?
    9. 9. 92. Developing a ConsistentScale of WagesTo do this you need:Internal Equity - how jobs are paidin relation to other jobs within theorganizationExternal Equity - how jobs are paidin relation to other companies
    10. 10. 10To achieve Internal Equity…You need a job evaluation plan to ensureall jobs are measured with the “sameruler”A Factor Point System Is the Most Effectiveunless Your Organization Is Small( Under10 People)For organizations less than 10 people , a jobranking system is probably better. Thisassumes the organization is not going togrow
    11. 11. 11A Factor Point System …Takes all the ingredients you want in your jobevaluation plan and gets information from thepositions in placeIt allows you to determine which factors you wantto use and how much weight each factor is worthThus it is customized uniquely to yourorganization and it is applied consistently to alljobs now and in the futureIt also allows you to determine if a change in jobmerits a change in pay
    12. 12. 12A Ranking System …Ranks the positions according to how muchthey contribute to the accomplishment ofthe organizations missionIt allows you to determine which is worthmostIt is only effective if the organization issmall (under 10 people)Clear communication is vital
    13. 13. 13To achieve External Equity…You need to define your market.Market is defined as to who you compareto, it’s your choice. I.E. same department inAlberta, defined geographic area, similarband/company in an other province.You need to define where you want to be inthe market (plus or minus ?%)Use your market for cost of livingadjustments as well.
    14. 14. 14Now you have consistencybecause….Internal equity – all positions aremeasured with the same ruler (jobevaluation plan)External equity – you use the samemarket for all jobs.Remember: in creating the above youused your organizations mission,success factors and culture.
    15. 15. 15Role of Consultant?Assist with the identification of factorsLink the factors to themission,organizations success, cultureand budgetDo salary surveyCreate the plan, assist withimplementation and provide ongoingsupport; at least a year afterimplementation
    16. 16. 16Benefits AgendaOverview of BenefitsPremiums vs ClaimsRetirement Plans
    17. 17. 17What will you do when...An employee dies or becomes disabled? Willyou feel a sense of financial obligation to theemployee and his or her family?Trying to attract and retain good employees?You or your employees travel extensively forbusiness or pleasure?You or your employees are confronted with anexpensive dentist bill?
    18. 18. 18Concept of Group InsuranceNobody expects to die, be injured,or become ill tomorrowHowever, if this does occur it can cause acatastrophic financial lossA benefits plan is a low cost solution that canprovide protection for the employee &employer from catastrophic financial lossesdue to death, injury or illness
    19. 19. 19Typical Group BenefitsEmployee andDependent LifeInsuranceAccidentalDeath andDismembermentOptional TermLifeShort TermDisabilityLong TermDisabilityHealthVisionDentalHealth SpendingAccountEmployeeAssistance Program
    20. 20. 20Why Life Insurance?Life insurance "creates cash" forneeds such as:funeral & burial chargesprobate feestaxes at deathincome replacementmortgagechildrens educationwealth & estate creation
    21. 21. 21Why Accidental Death &Dismemberment?At dismemberment...– for changes to ones lifestyleAt death...–extra income to deal with an"unexpected" loss
    22. 22. 22Why Disability Insurance?Where would the money come fromif you became disabled?SavingsLoansSpousal incomeSale of assets
    23. 23. 23Why Disability Insurance?Did you know that: Your chances ofwinning the Lotto 649 draw is 1 in 13.9millionThe odds of being disabled for >90 daysduring your working career are 8 xhigher than the chances of dying duringthe same periodThe average length of a disability whichlasts over 90 days is almost 3 years
    24. 24. 24The average disability which lasts over 90 days lasts anaverage of 2.9 years:Why Disability Insurance?2.42.22.82.73.23.13.4 3.4 3.5 3.53.3 3.32.8 2.92.1 2.20.00.51.01.52.02.53.03.54.0Years25 30 35 40 45 50 55 60At AgeWomen Men
    25. 25. 25Advantages of STD or LTD vsWorkers CompensationSTD WCB24 hour coverage Y NCovers an illness Y N
    26. 26. 26EI Rate ReductionMost STD plans are eligible for the EI RateReductionSavings of $.30/$100 of payrollSavings applied to employer portion ofpremium5/12 of savings must be re-distributed to theemployee in the way of:– cash rebate– new employee benefits– enhancement to existing employee benefits– etc.
    27. 27. 27Why Health & Dental?A "Maintenance Contract" for theorganizations most valuable resourcePeace of mind for employeesA better standard of livingTax freeOwners & Execs
    28. 28. 28Dentalcare Options– Deductibles– Calendar Year Maximums• $750 to unlimited– Periodontal Scaling Units• 6, 10, or 14 units per 12 months– Recall Examinations• 2 per 12, 1 per 9, or 1 per 12 months– Oral Hygiene Instruction
    29. 29. 29How Much Does a Plan Cost?The cost is based on:– Demographics of the group– Level of coverage for each of thebenefits– The volume of benefits– Prior experience of your group– Group size
    30. 30. 30Employee data is themost critical part of pricingBasic Monthly LTD Rates Per $10001234Age20Age30Age40Age50Age60Age GroupBasicMonthlyRateMales FemalesBasic Monthly Life Rates Per $100000.40.81.2Age 20 Age 30 Age 40 Age 50 Age 60Age GroupBasicMonthlyRateMales FemalesSource Great-West LifeDemographics and Rates
    31. 31. 312. Claims vs PremiumsYour plan is priced on the basis of yourdemographics and your usageIf you are old and heavy users you willpay more than if you are young and alight user
    32. 32. 32Advantages to EmployerEstablished corporate policy in theevent of death or disabilityAttract and retain key employeesIncreased moraleReduced absenteeism and increasedproductivity among employeesTax incentivesHassle-free administration
    33. 33. 33Advantages to the EmployeeBasic protection for the employee andfamilyLess expensive than individual insuranceHigher standard of healthcare thanotherwise possibleTax free compensationCoverage for “uninsurables”Hassle free administration
    34. 34. 34Common MistakesLife Ins & provincial medicarepremiums taxableLTD benefitPlan that encourages employees tospendNo cost sharingNo flexibility
    35. 35. 35SolutionsHave ees pay for Life, medicare andLTDIntroduce a Health Spending Account(funded by hi deductible)Have employees share in paying costof claims- 20% of Rx- 20 – 50% of Dental
    36. 36. 36Have an EAPCost is smallGives ees access to professionals for free(to them) and quicklyWhat are you paying to fix employeesteeth a month? $100 $200 or more ?The EAP can fix ees heads at a fraction ofthe cost
    37. 37. 37Employee as smartshopperTraditional planspaternalisticBest plans todayencourageemployees tobecomesmart shopperstake ownership of plan
    38. 38. 38Benefit Trends - Healthgeneric drugs & drug cardmay reduce drug costsno claims forms, paperworkInternet based administrationFlex plans for small employersHealth Spending Account
    39. 39. 39Benefit Trends - DentalCutbacks, cutbacks, cutbacksUnits of scaling– limit to 4 - 6 max per yearFreq of checkups (accountfor 40% of claims)– 9 months or 12 mo checkupsFee Schedule– Reasonable and customary
    40. 40. 40New BenefitsCritical CareConvalescent CareNew AD&D benefitsEAP
    41. 41. 41Benefit Trends - FlexTraditional flex plansare a painHealth SpendingAccount is gainingfavourTax effective
    42. 42. 42Health Spending Account Health SpendingAccount Funded by savings $ sit in ee nameuntil spent (18 mosmax) used for medicaldental expenses, notcovered by plan dental 20% ofbasic and 50% ofmajor restorative 50% of ortho, orover max vision over $200 many otherapplications tax free to ee
    43. 43. 43ASO PlansGood for employers of 80 employeesor moreFree up your reservesKeep premiums in your handsearning interest until accessedSurplus keep in your hands
    44. 44. 44Role of Consultant?Look at plan design & RatesLook at plans that ensure that ownersnever pay anything out of pocket thatmay be run thru the companyObtain quotes from other carriersConsultant is “free” as our fees arepaid by commission by the carriers inthe rates
    45. 45. 45What we need tocommence a Benefits ReviewBookletEmployee dataExperienceLetter ofauthorityPremiumHistoryIdea of anyplan design oradministrationchanges youwould like tomake
    46. 46. 463. Retirement PlansRSP plan, employer and employeefundedDefined Benefit Pension, employerfundedPros and consWe would be pleased to provide youwith a range of options
    47. 47. 47RSP or DC PlanMoney contributed by employer, say 5%of salaryMatched by employeeInvestedGrows over timeEmployee gets monthly income atretirement
    48. 48. 48Money for freeCCRA gives employees back most of theirpension or RSP contributions!!!For Owners pensions are a great way to getsurplus money held in the Corporation outof the Corporation tax freeSet up an IPP and recapture the differencebetween what the owner paid to his/herRSP and the increased cost of the IPP
    49. 49. 49Get up to 65% more into yourretirement assets than RRSPThe IPP is like an RRSP in that it uses aninvestment account that accumulates overtime to provide retirement benefits.Unlike the RRSP, the IPP guaranteesmonthly pension income.The amounts are locked-in and may beused only for retirement purposes.
    50. 50. 50IPP ContributionsContributions by employer (andemployee) are tax deductibleBenefits are taxed when receivedInvestment income tax exempt
    51. 51. 51IPP Max ContributionAge in 2013 Past Servicefrom 1991Current Service40 $61,700 $24,60045 $104,900 $27,00050 $161,100 $29,70055 $222,900 $32,60060 $290,800 $35,80065 $553,600 $38,700Maximum earnings $134,834Service commenced 1991 or earlier
    52. 52. 52RSP vs. IPP Current/Past Serv
    53. 53. 53IPP AdvantagesGreater tax deductible contributionsCreditor protectionExpenses tax deductiblePlan surplus belongs to ParticipantsInvestment returns balanced bycontributions
    54. 54. 54HR StrategiesEmployee satisfactionsurveyJob descriptionreviewCareer developmentTrainingFlextimeLet employeesdetermine how to dotheir jobPerformancemanagementRewards forsuccessful behaviour
    55. 55. 55Thank you!Questions?info@hylton.caTel 800 449-5866

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