From time to time, it is useful to step back and look at how things have changed in order to spot emerging trends for the future. Looking back a dozen years (a timescale picked simply because that is when I first joined Employee Benefits), benefits packages were more likely to be run in silos – with pensions separate from healthcare, and voluntary benefits as an add-on afterthought. No doubt this is still true in many organisations.
But looking at this month’s issue of Employee Benefits, it is clear things are being done differently in 2010 by forward-thinking employers. There is much greater cohesion in benefits thinking. Many employers have worked hard over the years to bring reward communications together in total reward statements (see news stories on Catlin and Insights Learning and Development), while flexible and voluntary benefits are viewed far more cohesively (see Flexible benefits supplement and The big question).
For example, trying to spot the difference between a flexible and voluntary benefits package is far more difficult than it was. Staff sacrificing salary so employers buy benefits on their behalf – is that voluntary or flexible? Many may argue this is tax-efficient voluntary benefits. But what if it is structured so staff without a pot of money to spend on benefits can still ‘buy’ perks in a flex package? Is that flex?
To me, this moulding of delivery strategies to fit the organisation, rather than sticking to rigid, separate plans, is a good sign.
This integration has been taken even further by the likes of the BG Group (see Flexible benefits supplement), which invited staff to ‘spend’ shares in their flex plan. Last month we saw CSC become the first employer to launch a fully-fledged corporate wrap (offering staff interactive tools and a range of savings products), which is likely to lead to an ever-closer integration of pensions and other financial services into flexible and voluntary benefits.
Even a benefit like the company car can’t be left out in its own department. The rise of salary sacrifice schemes mean managers need to fully understand the inter-benefit impact of changing taxable pay across cars, pensions and various tax credits.
Today’s benefits managers really need to have a handle across the package.
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