Employee Retention Solutions for building and retaining a productive workforce May 21st, 2014 Tyler Ray RBC Group Advantage Information included within is current as of April 2013, is for informational purposes only and does not constitute financial or other advice. TM 1
Current Employment Marketplace Industry leaders understand the importance of building and maintaining a strong team Key factors in achieving this: Attracting and retaining top talent Providing more value for money spent on employee benefits Promoting financial wellness Being creative with R&R 2
Attracting and retaining top talent 3
Attracting and retaining top talent Turnover can cost your company 50-75% of the employee s salary Low Mid High SOURCES: Aon Hewitt, Bersin & Associates, Gallup, Globoforce, McKinsey, Towers Watson, 2010 Right Management Survey 4
5 Attracting and retaining top talent
Employee Benefits - Value for Money Industry Trends Employees prioritize benefits in order of: 1. Wages 2. Comprehensive Insurance Benefits 3. Retirement Benefits Employers are reviewing their offerings in these categories to assess value for money/cost effectiveness as well as employee engagement 6
Employee Benefits - Value for Money Retirement Benefit Plans Industry Trends 1. Defined Benefit Pension Plans -> Defined Contribution Plans 2. DC Plans -> Group RSP Plans 3. Future Pooled Retirement Pension Plan? Reasons for change are reduced employer cost, reduced employer risk and increased employee engagement in company plan 7
Group Retirement Savings Plans What is it? A collection of individual RRSP accounts Members make contributions from their payroll Who regulates it? Individual accounts adhere to the Income Tax Act Plan is registered with the Canada Revenue Agency How are assets accumulated Plan Options and Investments Restrictions or Vesting CAP Guidelines define sponsor, member and administrator responsibilities Employer and/or employee contributions Personal and Spousal plan Investment options selected by employees based on choices available within the plan. Employer and/or employee contributions 8
Group Retirement Savings Plans Contribution Limit Tax Consequences for Company Tax Consequences for Members Withdrawals by Members Termination and Retirement 18% of the employee s previous year s earned income (up to $23,820 in 2013) plus or minus other adjustments. Should consult CRA Notice of Assessment from previous year. Employer contributions are considered part of an employee s salary, are considered tax deductible as an expense, and are subject to payroll taxes (e.g. CPP, EI, etc.). Payroll deduction contributions reduce income for tax purposes. Tax receipt issued for member and company contributions. Immediate tax savings through reduced withholding at source. Taxable as income unless transferred to another registered plan. Withdrawals are subject to withholding taxes. Assets can be transferred to an RRSP, RRIF. Assets can be taken in cash as a withdrawal from the plan. Assets can be transferred to a RRIF or used to purchase an annuity no later than age 71. 9
Promoting Financial Wellness Definition of FINANCIAL WELLNESS: The balance between having a healthy state of well being today while preparing financially for tomorrow. It is not necessarily about being wealthy, but it is a state of psychological well being in which one feels they have control over their current finances and financial future. 10
11 Promoting Financial Wellness
Creative Employee Benefit Best Practices Providing R&R programs that encompass benefits i.e. Bonuses to Retirement Plans for achieving milestones or goals, directing bonuses to plans achieve tax sheltering for employee etc. Enhancing employee benefit packages through other non-traditional means i.e. Using reward points earned through company credit cards for employee R&R, provide value add partner rewards at minimal or no cost to company 12
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Totals are not cumulative, and if not used, may not be carried over in to the next Monthly Cycle. + To receive $625 worth of gift cards/certificates, you will need a total of 75,000 RBC Rewards points. To receive $350 worth of gift cards/certificates, you will need a total of 42,500 RBC Rewards points. For more details on the RBC Rewards Program, visit www.rbcrewards.com. For complete terms and conditions of the group banking offer, visit www.rbc.com/groupterms. ++ Eligible Canadian accounts include any two of the following banking accounts with the monthly fees waived: RBC Day to Day Banking, RBC Enhanced Savings and RBC Day to Day Savings. The eligible U.S. Account is the U.S. Personal Account. All accounts must be in the same geographic location or region. 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Other conditions and restrictions apply. 1 The interest rate will fluctuate with the Prime Rate and is subject to change at any time without notice. These rates can be changed, withdrawn or extended at any time without notice. Residential mortgages are offered by Royal Bank of Canada and are subject to its standard lending criteria. 2 We will pay the basic title insurance fee, processing fee and one discharge fee (up to $300 maximum). Offer excludes mortgage prepayment charges that you may have to pay. Minimum advance $100,000. 3 Eligible RBC Royal Bank residential mortgages include 4, 5 and 7 year, fixed rate, closed terms with a maximum 120-day rate guarantee, conventional or default insured residential mortgages, RBC Homeline Plan mortgage segments that are funded on the same day the RBC Reward points offer is extended, and builder retail mortgages with a single advance on completion. Offer only applies to purchase transactions or a switch from another Canadian financial institution. 4 Points calculated based on opening an RBC VIP Banking account and completing the qualifying criteria, getting an RBC Visa Infinite Avion credit card, completing CustomSwitch and opening an RBC High Interest esavings account. Please visit www.rbc.com/groupterms for full details. 5 Points calculated based on opening an RBC VIP Banking account and completing the qualifying criteria, getting an RBC Visa Infinite Avion credit card, completing CustomSwitch, opening an RBC High Interest esavings account and funding a $325,000 mortgage. Please visit www.rbc.com/groupterms for full details. Points calculated based on funding of an eligible RBC Royal Bank residential mortgage and completing the qualifying criteria. Please visit rbc.com/groupterms for full details. Personal lending products and residential mortgages are provided by Royal Bank of Canada and are subject to its standard lending criteria. ^^ RBC Rewards points will be cancelled if they remain unredeemed within ninety (90) days after the termination of the RBC Rewards program or after you voluntarily close your RBC Royal Bank credit card account. *** All rewards are subject to availability. Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec. RBC Funds are offered by RBC Asset Management Inc. and sold by Royal Mutual Funds Inc. 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