Flexible benefits plans allow employees to choose the benefits they want from a list of options. This provides more choice and control for employees while controlling costs for employers. The document discusses the key advantages like improved employee engagement and control over costs. Potential disadvantages include increased administration complexity and costs. Effective communication is important to help employees understand their options. Flexible plans may help facilitate organizational changes and be adapted to employees' changing needs over time. Determining what benefits employees value most helps design effective flexible plans.

1. The benefits of being flexible
by Toronto Training and HR
April 2012

2. 3-4 Introduction to Toronto Training and HR
5-7 Definitions
Contents 8-9
10-15
Foundations of a benefits plan
Communication
16-18 Advantages of flexible benefits
19-20 Disadvantages of flexible benefits
21-22 Outsourcing flexible benefits
23-25 Key areas that need to be assessed
26-27 The tax situation around flexible
benefits
28-30 Project plan for flexible benefits
31-32 Implementing a flex plan
33-34 How flexible benefits can facilitate
change
35-37 Determining what employees value
38-40 Questions which impact on strategy and
design
41-43 Flex in the future
44-45 Drill
46-55 Case studies
56-57 Conclusion and questions
Page 2

3. Introduction
Page 3

4. Introduction to Toronto Training
and HR
• Toronto Training and HR is a specialist training and human
resources consultancy headed by Timothy Holden
• 10 years in banking
• 10 years in training and human resources
• Freelance practitioner since 2006
• The core services provided by Toronto Training and HR are:
- Training event design
- Training event delivery
- Reducing costs
- Saving time
- Improving employee engagement & morale
- Services for job seekers
Page 4

5. Definitions
Page 5

6. Definitions 1 of 2
Flexible benefits
Cafeteria benefits
Flex plan
Page 6

7. Definitions 2 of 2
TYPICAL BENEFITS
Learning and development
Lifestyle options
Financial and legal
Health and wellbeing
Page 7

8. Foundations of a benefits
plan
Page 8

9. Foundations of a benefits plan
Health insurance for expenses not covered by your
provincial plan
Dental benefits
Group life insurance
Short- and long-term disability plans
Retirement savings plans
Vacation and other paid time off
Page 9

10. Communication
Page 10

11. Communication 1 of 5
Brief (each time)
Jargon-free
Branded
Tailored to its audience: employees are interested
in matters affecting them personally, so the more
a company can target the information individually,
the more buy-in it will achieve
Page 11

12. Communication 2 of 5
Direct
Championed: if someone known and respected
believes in the scheme and can put forward their
case study, others will buy in too
Page 12

13. Communication 3 of 5
QUESTIONS TO ASK:
What is the best way to design a unique brand and
style?
What needs communicating?
Who are you communicating to?
What media do you need to use?
Who will be the communicator?
What is the best timing?
How can communication difficulties be overcome?
Page 13

14. Communication 4 of 5
DEVELOPING A COMMUNICATION STRATEGY:
Review current benefit awareness
Establish preferences for benefit communication
Examine employee attitudes to flexibility in
benefits and the value/concerns they may have
regarding this issue
Page 14

15. Communication 5 of 5
DEVELOPING A COMMUNICATION STRATEGY:
Get it!
Support it!
Do it!
Page 15

16. Advantages of flexible
benefits
Page 16

17. Advantages of flexible benefits
1 of 2
Employees choose benefits they want and value,
rather than having to accept unwanted and under-
valued benefits
Where a budget system is adopted, the cost of
benefits is controlled better
Employers and employees share responsibility for
benefits
Employees can change their benefits as their
lifestyle changes
Page 17

18. Advantages of flexible benefits
2 of 2
Employees participate in the design of their reward
package
Dual-career couples avoid the duplication of
benefits
Employers are seen as responding to employee
demands for flexibility
Page 18

19. Disadvantages of flexible
benefits
Page 19

20. Disadvantages of flexible
benefits
Danger of increasing costs
Problem of valuing benefits
Discounts may be lost if some employees withdraw
Complex administration
Need for financial counselling
Tax implications
Page 20

21. Outsourcing flexible
benefits
Page 21

22. Outsourcing flexible benefits
Ensure there are clearly defined reasons for
outsourcing
Ensure contracts are drawn up well
Ensure a good but practical set of service level
agreements
Ensure the outsourcer provides a good set of
guarantees and performance bonds
Make absolutely sure that the contract caters for
all eventualities
Page 22

23. Key areas that need to be
assessed
Page 23

24. Key areas that need to be
assessed 1 of 2
Supporting and enhancing the organization’s
mission statement and key priorities
Employee benefits review
Market issues
Employees’ and employers’ prospective
Employment law issues
Communications issues
Product selection and mix
Page 24

25. Key areas that need to be
assessed 2 of 2
Administration, IT and outsourcing
Project management
Financial benefits, costs and risk analysis
Monitoring and evaluation
Page 25

26. The tax situation around
flexible benefits
Page 26

27. The tax situation around flexible
benefits
Clearly understand the current tax and social
insurance position
For each product selected, define precisely its tax
treatment
Assess mixing benefits together and the use of
salary and bonuses to fund choices
Use modelling to find the best mix
Develop a clear, simple effective communication
strategy specifically for tax
Page 27

28. Project plan for flexible
benefits
Page 28

29. Project plan for flexible benefits
1 of 2
Agreement of benefits program and items to
include
Benefit products and providers agreed
System configuration
Payroll feed
Employee data provided
Security checks
Scheme booklets designed and printed
Page 29

30. Project plan for flexible benefits
2 of 2
Communication documentation issued to
employees explaining the scheme
Testing of site
Site signed off by client
Site signed off by administration team
Go live-enrolment period
Page 30

31. Implementing a flex plan
Page 31

32. Implementing a flex plan
Don’t provide too many options
Repackage benefits to provide employees with the
coverage they need, but don’t break it down so
much that you’ll get “cherry-picking”
Simplify the price/credit structure
Have well-planned communication
Page 32

33. How flexible benefits can
facilitate change
Page 33

34. How flexible benefits can
facilitate change
Restructuring company care schemes
Integrating incompatible terms and conditions
after mergers and acquisitions
Introducing new payment systems
Reinforcing cultural changes
Page 34

35. Determining what
employees value
Page 35

36. Determining what employees
value 1 of 2
Is it tax-effective for the employee?
Is the benefit not generally available outside of
work?
Does it enhance the company’s image and
branding?
Page 36

37. Determining what employees
value 2 of 2
Does it offer a discount pricing advantage?
Does it add cost to the existing benefits plan?
What is the impact on the total rewards package
of pay, benefits, career development and work/life
balance?
Page 37

38. Questions which impact on
strategy and design
Page 38

39. Questions which impact on
strategy and design 1 of 2
When are you looking to introduce the scheme?
How will you be administering the scheme?
What benefits do you currently provide (and at
what levels), and who do you provide them for?
What benefits must you provide in the future?
What benefits do you want employees to have
going forward and at what minimum levels?
What benefits do your employees want?
Page 39

40. Questions which impact on
strategy and design 2 of 2
Who do you want to be able to select each of the
benefits?
How much money will you give your employees to
spend on their own benefits?
How much of their own cash will employees be
allowed to spend on their benefits?
Who provides your existing benefits, and can or
will they provide benefits on a flexible basis?
Page 40

41. Flex in the future
Page 41

42. Flex in the future 1 of 2
Fixed amounts for contribution to the premium
cost of additional group insurance, such as drug,
dental, hospital and out-of-country medical
coverage, paramedical and private duty nursing
and optional life insurance
Lifestyle accommodation benefits, such as flexible
work arrangements, personal and professional
growth opportunities, work/life balance options,
wellness programs, flexible work hours and
vacation purchases
Page 42

43. Flex in the future 2 of 2
A plan to cover medical and dental expenses
deemed eligible by the Canada Revenue Agency,
such as cosmetic dental services
Additional voluntary contributions funded by the
employee, with the employer contributing a fixed
percentage
Page 43

44. Drill
Page 44

45. Drill
Page 45

46. Case study A
Page 46

47. Case study A
Page 47

48. Case study B
Page 48

49. Case study B
Page 49

50. Case study C
Page 50

51. Case study C
Page 51

52. Case study D
Page 52

53. Case study D
Page 53

54. Case study E
Page 54

55. Case study E
Page 55

56. Conclusion and questions
Page 56

57. Conclusion and questions
Summary
Videos
Questions
Page 57