- Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs.

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1 CH. 11 Requirements for a Sound Benefits program - Strategic benefits planning - Communicating employee benefits information - Providing for flexibility - Allowing for employee involvement - Benefits for a diverse workforce Management Concerns Concerns of Managements - Union demands for additional benefits - Benefits offered by other employees - Tax consequences of benefits - Rising costs of providing benefits Strategic Benefits Planning/Objective of Benefits Program - Improve employee work satisfaction - Meet employee health and security requirements - Attract and motivate employees - Reduce turnover - Maintain a favourable competitive position Providing for Flexibility Flexible Benefits Plans (Cafeteria Plans) - Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs. - A basic or core benefits package of life and health insurance, sick leave, and vacation ensures that employees have a minimum level of coverage. - Employees use credits to buy whatever other benefits they need. ADVANTAGES - Employees select benefits to match their individual needs. - Benefit selections adapt to a constantly changing (diversified) workforce.

2 - Employees gain greater understanding of the benefits offered to them and the costs incurred. DISADVANTAGES - Poor employee benefits selection results in unwanted financial costs. - There are certain added costs to establishing and maintaining the flexible plan. - Employees may choose benefits of high use to them that increase employer premium costs. Communication Benefits Information - In-house publications (employee handbooks and organizational newsletters) - Group meeting and training classes - Audiocassettes/videotapes - Bulletin boards - Payroll inserts/pay stub messages - Specialty brochures - Employee self-service systems (ESS) Concerns of Management - Union demands for additional benefits - Benefits offered by other employees - Tax consequences of benefits - Rising cost of providing benefits - Benefits coverage for domestic partners Benefits Mandated by Law Required by Law - Canada/Quebec pension plans - Employment Insurance - Worker s Compensation - Provincial Hospital and Medical Services Discretionary - Health care - Payment for time not worked - Severance Pay

3 - Life and LT Care insurance - Retirements and pensions Canada and Quebec Pension Plans - Covers all employees between ages of 18 and Used to pay retirement pensions, disability benefits and survivor benfits. - All contributions come from employers and employees Employment Insurance - Benefits paid to claimants who are unemployed and actively seeking employment. - Amount paid is determined by the number of hours of employment in the past year, and the regional unemployment rate. - Additional benefits may be extended for situations involving illness, injury, quarantine, and for maternity, paternity or adoption leave. Worker s Compensation Insurance - Provincial and territorial insurance (funded by an employer payroll tax) provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness. - Factors influencing the employer s insurance rate: Reducing Worker s Compensation Costs: Key Areas 1. Perform an audit to assess high-risk areas within a workplace. 2. Prevent injuries by proper ergonomic design of the job and effective assessment of job candidates. 3. Provide quality medical care to injured employees by physicians with experience and preferably with training in occupational health. 4. Reduce litigation by effective communication between the employer and the injured worker. 5. Manage the care of an injured worker from the time of injury until return to work. 6. Keep a partially recovered employee at the work site. 7. Provide extensive worker training in all related health and safety areas. Provincial Hospital and Medical Services - Many employers offer third party benefits coverage for additional benefits, beyond provincial health care

4 Discretionary Major Employee Benefits - Health care benefits - Payment for time not worked - Severance pay - Life insurance - Retirement programs Health Care Benefits - Health care benefits which include the costs of hospitalization, prescription drugs, dental care, optical care, and mental health benefits. - Cost containment: Process of maintaining organizational costs within a specified budget; restraining expenditures to meet organizational or project financial targets Payment for Time not Worked - Vacations with pay - Paid holidays - Sick leave - Severance pay Retirement Programs Silver Handshake - An early-retirement incentive in the form of increased pension benefits for several years or a cash bonus. Preretirement Programs - Counseling - Seminars - Workshops - Retirement tryouts Types of Pension Plans Contributory plan - Contributions to a plan are made jointly by employees and employers Defined-benefit plan - The amount an employee is to receive upon retirement is specifically set forth

5 Noncontributory plan - Contributions to a plan are made solely by the employer Defined-contribution plan - The basis (amount) an employer contributes to the pension fund is specified. Federal Regulation of Pension Plans Vesting - A guarantee of accrued benefits to participants at retirement age, regardless of their employment status at that time. Pension Portablity - Employees who leave an organization can leave their funds in their current plan or transfer those funds to a locked-in RRSP or into their new employer s pension plan. - Pension Funds Employee Services: Creating a Work/Life Setting Employee Assistance Programs (EAPs) - Services provided by employers to help workers cope with a wide variety of problems that interfere with the way they perform their jobs. - Typically provide diagnosis, counseling, and referral for advice or treatment for problems related to alcohol or drug abuse, emotional difficulties, and financial or family difficulties. Child and Elder Care - Care provided to a child or an elderly relative by an employee who remains actively at work. Benefits - Educational Assistance Plans Family-Friends Benefits - Child care/elder care referral services - Time off for children s school activities - Employer-paid onsite or near-site child care facilities - Flexible work hours scheduling

6 Other Benefits and Services - Awards - Recreational and Social - Food Services - Legal services - Transportation Pooling - On-Site Health Services