Presentation is loading. Please wait.

Presentation is loading. Please wait.

EMPLOYMENT BENEFITS. Employee Benefit Programs Part of Total Compensation Some Government Mandated Some Incentive Related Part of Cost of Doing Business.

Similar presentations


Presentation on theme: "EMPLOYMENT BENEFITS. Employee Benefit Programs Part of Total Compensation Some Government Mandated Some Incentive Related Part of Cost of Doing Business."— Presentation transcript:

1 EMPLOYMENT BENEFITS

2 Employee Benefit Programs Part of Total Compensation Some Government Mandated Some Incentive Related Part of Cost of Doing Business Indirect Compensation

3 Factors Contributing to Growth of Benefit Discourage Unions Benefits not Always Taxed Easier to negotiate Than Wages Attitude of General Public

4 Objectives of Benefit Programs To Improve Morale To Meet Health and Safety Needs To Attract Good Employees To Reduce Turnover To Reduce Unionism To Maintain a Competitive Position To Enhance the Organization's Image

5 Basis for Employee Benefits Organizational Objectives Human Resources Objectives Employee Benefit Package Government Regulations Financial Resources Collective Bargaining Recruiting Competition EMPLOYEES Employee Participation Employee Needs Providing Individual Benefits Communicating Benefits

6 Employee Benefits Required by Law

7 Types of Benefits Time-off (vacation, sickness, holidays, etc.) Legal Social Security Medical Payments Retirement Paid Rest Periods (breaks) Life Insurance

8 Categories of Employee Benefits BENEFITS REQUIRED BY LAW Old age and survivors insurance (OASI) Unemployment insurance Workers’ compensation Leaves without pay

9 Categories of Employee Benefits PAYMENT FOR TIME NOT WORKED Holidays Vacations Sick leave Supplemental unemployment benefits (SUB) Jury duty, military service, and bereavement leaves

10 Categories of Employee Benefits INSURANCE Group life insurance Health care insurance Legal insurance

11 Categories of Employee Benefits RETIREMENT BENEFITS Pension plans Deferred compensation plans Pre-retirement counseling

12 Categories of Employee Benefits EMPLOYEE SERVICES Employee assistance program Counseling services Educational assistance plans Child care Elder care Food services Health services Legal services Financial planning Housing and moving expenses Transportation pooling/parking Purchasing assistance Credit unions Social and recreational services Awards

13 Employee Benefit Costs 30-40% of the Annual Wages Fastest Growing Part of Total Compensation

14 Typical Cost of Benefits TYPES OF BENEFITS TOTAL PERCENTAGE, ALL COMPANIES Payments for vacations, sick leave, holidays, etc.12.0% Legally required payments10.0 % Medical and medically related benefit payments10.0 % Retirement and savings (employer’s share)7.0 % Paid rest periods, lunch periods, etc.3.0 % Miscellaneous benefits1.0% Life insurance.5% Total employee benefits as percent of payroll43.5%

15 COST YEAR $4000 $1500 Health Plan Costs Climb Higher Annually Average Annual Health Plan Costs Per Employee

16 Flexible Benefits Plan (Cafeteria Plans) Benefit plan that enable individual employees to choose the benefits that are best suited to their particular needs.

17 Flexible Benefit Plans Employees Choose Cafeteria Plans Cost Attached Some Government Requirements

18 Major Concerns Rising Costs Controlling Costs Legal Concern

19 Pension Plans: Provide for Retirement Income Federal Regulation - Not Total Coverage Reward for Long Service Originally Now Based on Earnings Philosophy

20 Types of Pension Plans Contributory (joint pay) Non-Contributory (employer pays) Classified by Amount of Benefits to be Paid

21 Noncontributory Plan A pension plan where contributions are made solely by the employer.

22 Defined Benefit Plan Amount is Specifically Defined Years of Service Required Average Earnings During Certain Years Age at Retirement “Example: Average Annual Salary of Last 3-5 years x number of years of service”

23 Defined Contribution Plan Basis Upon Which the Employer Pays Paid to Thrift Plan, IRA, etc. Benefits Depends Upon Accumulation

24 Federal Regulation (ERISA) Employee Retirement Income Security Act Informed About Facts Benefits Defined Complex Law

25 Vesting A guarantee or accrued benefits to participants at retirement age, regardless of their employment status at that time.

26 Vesting Guarantee of Benefits Paid at Retirement Regardless of Last Employment Non-revokable by Employer Vested After XX Years Complex Rules (ERISA)

27 Vesting Provisions (General Plans) General Provisions* 1.5-Year Vesting: An employee must receive nonforfeitable rights after five years of service to all accrued benefits derived from employer contributions to 7-Year Vesting: An employee must receive nonforfeitable rights after three years of service to 20 percent of accrued benefits derived from employer contributions. Nonforfeitable rights increase 20 percent each year until the employee is 100 percent vested in the employer-derived accrued benefits after 7 years of service.

28 Social Security Insurance Guarantee of Income Retirement, Disability, Unemployment Time Limits Complex Rules Dedicated Tax on Earnings

29 Pension Funds Privately Managed $3 Trillion in Assets Invested in Stocks and Bonds

30 Unemployment Insurance Defined Period (26 weeks) Register for Work Requirement Funded by Payroll Tax Amount Based on Wages Supplemental Unemployment Benefits (Private)

31 Worker’s Compensation Insurance Federal-or-state-mandated insurance provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness.

32 Worker's Compensation Work Related Accident Compulsory Complex Law Based on Wages Permanent or Partial Disability

33 Health Care Insurance Partial Government Funded Mostly Private Insurance

34 Why Are Health Care Costs Skyrocketing? Federal Regulation Changes in Pricing Advances in Medicine Malpractice Insurance Labor Costs Over Utilization of Facilities Elder Care Transplants/AIDS/Other

35 Health Maintenance Organizations (HMOs) Organizations of physicians and health care professional that provide a wide range of services to subscribers and dependents on a prepaid basis.

36 Cost Containment Vehicles HMO (Health Maintenance Organization) Group of Professionals Services for Fixed Amounts PPO (Preferred Provide Organization) Group of Professionals Guarantees Cost Efficiency for Groups Employer Steers Employees to PPO

37 Retirement Planning Programs Company Pension Plans Social Security/Medicare Health Care Insurance Personal Financial Planning Legal Concerns Investments/Tax Planning Volunteerism Part-Time Employment Housing Options Relocation

38 Silver Handshake An early-retirement incentive in the form of increased pension benefits for several years or a cash bonus.

39 Decisions Relating to Pensions DECISIONSALTERNATIVES PhilosophyEarned vs reward Source of fundsContributory vs non-contributory Amount of benefitsDefined benefits vs defined contributions Custody of pension fundsInsured vs trusteed plans Investment problems Protections against loss of funds Protection against loss of purchasing Where and where not to invest Tax consequences

40 Benefit Links Hewitt Associates UCbencom

41

42

43

44


Download ppt "EMPLOYMENT BENEFITS. Employee Benefit Programs Part of Total Compensation Some Government Mandated Some Incentive Related Part of Cost of Doing Business."

Similar presentations


Ads by Google