Half day interactive open workshop in Toronto on employee benefits.

1. Getting the benefit from benefits by Toronto Training and HR May 2011

2. Contents 3-4 Introduction to Toronto Training and HR 5-6 Why have an employee benefits plan 7-8 Most common employee benefits provided 9-14 What is typical? 15-21 Critical illness insurance 22-24 Employee assistance programs 25-26 Drill 27-30 Retirement plans 31-36 What do people REALLY think about pensions? 37-38 Ethical pensions 39-44 Outsourcing benefits 45-48 Overtime…for managers? 49-50 Benefits communication 51-52 Selecting a benefits provider 53-54Making benefits effective 55-58 Case studies 59-60 Conclusion and questions Page 2

3. Page 3 Introduction

6. Improving employee engagement & morale

8. Page 6 Why have an employee benefit plan? EMPLOYERS PROVIDE BENEFITS TO EMPLOYEES: Comply with provincial and government regulations Motivate and support existing workers, particularly the high-performers that are important to retain Help attract new employees Strengthen the long-term commitment of employees to the organization Reduce stress associated with health and financial difficulties Improve the mental and physical health of employees

9. Page 7 Most common employee benefits provided

10. Page 8 Most common employee benefits provided Medical insurance Dental insurance Vision care Group-term life insurance Disability insurance Critical illness Employee assistance plan

11. Page 9 What is typical…medical insurance

12. Page 10 What is typical…medical insurance Prescription or prescribed drugs Prescription eye glasses Contact lenses Professional services and paramedical practitioners Semi-private hospital room Out of province and out of country hospital and medical expenses Ambulance, lab charges Hearing aids Medical supplies Prosthetics, appliances and medical equipment

13. Page 11 What is typical…dental insurance

14. Page 12 What is typical…dental insurance Diagnostic and preventative treatment Minor restorative treatments Major restorative treatments Orthodontics

15. Page 14 What is typical…vision care

16. Page 6 What is typical…vision care Prescription eye glasses Contact lenses Laser eye surgery

17. Page 15 Critical illness insurance

18. Page 16 Critical illness insurance 1 of 6 WHY IS IT IMPORTANT? Disability insurance replaces income but is insufficient for the added burden of medical expenses Group health coverage has restrictive limitation and maximums Social medical care is eroding and cannot be relied upon Personal and retirement savings have intended purposes other than medical expenses Most critical illness victims make a full recovery after a lengthy expensive treatment period

19. Page 17 Critical illness insurance 2 of 6 CANADIAN STATISTICS 1 in 2 will contract heart disease 1 in 2 heart attack victims are under age 65 1 in 3 will develop some form of life threatening cancer 1 in 4 currently suffer from cardiovascular disease 70% of open heart surgery operations each year are coronary bypasses 1 in 4 will suffer kidney failure 1 in 20 run the risk of having a stroke before age 70 1 in 500 people will suffer from multiple sclerosis

20. Page 18 Critical illness insurance 3 of 6 CANADIAN STATISTICS Heart attack, cancer and stroke are the three most common diseases 1 in 4 will contract cancer or heart disease before they retire Two-thirds of the cost of cancer treatment is not covered by provincial medical plans 30% of cancer victims are completely cured 75% of stroke victims survive the initial occurrence 95% of heart attack victims survive the initial occurrence

21. Page 19 Critical illness insurance 4 of 6 CONDITIONS THAT COULD BE COVERED Cancer (life-threatening) Heart attack stroke (cerebrovascular incident) Coronary artery by-pass surgery Multiple sclerosis Kidney failure (end-stage renal disease) Major organ transplant Paralysis (two or more limbs)

22. Page 20 Critical illness insurance 5 of 6 CONDITIONS THAT COULD BE COVERED Deafness Blindness Parkinson’s Disease Alzheimer’s Disease Motor Neurone Disease Permanent total disability Severe burns

23. Page 21 Critical illness insurance 6 of 6 WHAT TO LOOK FOR IN CRITICAL ILLNESS COVERAGE Clear definitions (medical terminology) No restrictions at the time of claim, for instance HIV exclusions Comprehensive scope of coverage Lump sum benefit payment for claims

24. Page 22 Employee assistance programs

25. Page 23 Employee assistance programs 1 of 2 Absenteeism Productivity Attrition Disability

26. Page 24 Employee assistance programs 2 of 2 FEATURES TO LOOK FOR Direct access Quick response Professional Confidentiality Off site Direct treatment Appropriate coverage

27. Page 25 Drill

28. Page 26 Drill

29. Page 27 Retirement plans

30. Page 28 Retirement plans 1 of 3 DEFINED BENEFITS PLANS Advantages Disadvantages DEFINED CONTRIBUTIONS PLANS Advantages Disadvantages GROUP REGISTERED RETIREMENT SAVINGS PLANS Advantages Disadvantages

31. Page 29 Retirement plans 2 of 3 WHICH PLAN IS BEST FOR OUR ORGANIZATION? Amount to spend Internal resources and people available to manage and administer the plan Risk of guaranteeing a set pension (Defined Benefit) or leaving the responsibility for the performance of the retirement funds (Defined Contribution)

32. Page 30 Retirement plans 3 of 3 POINTS TO REMEMBER Changes in life expectancy, the economic downturn and mobility in the labour market have contributed to the shift from defined benefit (DB) to defined contribution (DC) schemes Many employees perceive DB plans to be of greater value than DC, but this is not necessarily so-low DB accrual rates may produce a lower return than good contribution levels to a DC plan Employers should clearly explain the good points of moving to a DC plan, such as the employer contributions

33. Page 31 What do people REALLY think about pensions?

34. Page 32 What do people REALLY think about pensions? 1 of 5 It is a valuable recruitment tool It is a valuable retention tool As an organization, they feel responsible for employees‘ long-term financial wellbeing There is too much regulation involved in running a pension scheme They have to offer a pension scheme because competitors do

35. Page 33 What do people REALLY think about pensions? 2 of 5 Pension schemes have become too expensive to run Pensions are the benefit that most employees want above all other benefits Employees have lost trust in employer-provided pension schemes Most employees would prefer to forgo the pension scheme and have more basic pay

36. Page 34 What do people REALLY think about pensions? 3 of 5 REASONS PEOPLE DON’T JOIN Affordability Other financial demands and interests Apathy/inaction Lack of understanding about pensions generally Lack of interest Lack of awareness about pensions Lack of trust in pensions Not seen as a good investment

37. Page 35 What do people REALLY think about pensions? 4 of 5 ENSURING PEOPLE HAVE AN ADEQUATE PENSION IN RETIREMENT Actively encourage pension scheme membership Ensure employer contributions are adequate Actively encourage employees to make adequate contributions Proactively educate employees on pensions Offer access to independent financial advice Include pensions as part of total reward statements Operate compulsory minimum contributions for employer and employees

38. Page 36 What do people REALLY think about pensions? 5 of 5 MEASURING RETURN ON INVESTMENT No action taken By looking at pension scheme take-up By including it in a staff satisfaction survey By looking at retention By looking at recruitment By including it in a staff engagement survey They do not but plan to in the future

39. Page 37 Ethical pensions

40. Page 38 Ethical pensions Ethical investment funds enable people to invest pension contributions in companies that have ethical practices More employers are offering an ethical pension fund option A fund can actively seek to invest in organizations considered to be ethical, or screen out those considered to be involved in unethical activities Positive criteria include environmental conservation, equal opportunities and animal welfare. Negative criteria can include health and safety breaches, poor relations with employees and customers, and nuclear power

41. Page 39 Outsourcing benefits

42. Page 40 Outsourcing benefits 1 of 5 COSTS GETTING REDUCED Maturing industry Increased competition Offshoring COST OF INTERNAL ADMINISTRATION Internal administrative people IT expenses

43. Page 41 Outsourcing benefits 2 of 5 RISK CONSIDERATIONS Maturing industry Increased competition Offshoring COST OF INTERNAL ADMINISTRATION Staffing risk Systems risk Database risk Error risk

44. Page 42 Outsourcing benefits 3 of 5 ADMINISTRATION OPTIONS Online sites providing access to tools and resources Expanded capacity to ensure consistent service CHALLENGES TO INTERNAL BENEFITS ADMINISTRATION Plan design and security changes that impact administration requirements New employer groups or plans added through acquisition High transaction volumes driven by a reduction in force or location closure Administrative changes driven by new legislative or regulatory compliance

45. Page 43 Outsourcing benefits 4 of 5 IS OUTSOURCING RIGHT FOR YOUR ORGANIZATION? Employee numbers are limited, so they struggle to keep up during annual enrolment or when other new changes are implemented One or two people on the HR team hold much of the historical knowledge The system (or worksheet) currently used is out of date and difficult to modify It’s difficult to get support from the IT department Records are not centralized—some in paper files, some in other databases

46. Page 44 Outsourcing benefits 5 of 5 IS OUTSOURCING RIGHT FOR YOUR ORGANIZATION? The organization struggles to keep administration consistent with the most recent law changes Calculation or administration errors have led to costly legal settlements It is desirable for employees to have online tools so they could model their own pension estimates instead of calling HR Employees can’t get daily work done because of participant calls

47. Page 45 Overtime…for managers?

48. Page 46 Overtime…for managers? 1 of 3 Supervision of other employees Role in running the organization How much the individual earns

49. Page 47 Overtime…for managers? 2 of 3 IN SUMMARY-employees may still have a right to receive overtime even if they’re considered managers under the employment standards laws if: they’re covered by the mandatory overtime provisions of the employment standards law; and/or overtime is required under the terms of the employment contract or collective agreement. Consider not just what the employment standards law says but what the contract requires

50. Page 48 Overtime…for managers? 3 of 3 POSITION IN ONTARIO Person “whose only work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis” exempt from overtime; and regulations don’t define “supervisory or managerial” (Exemptions, Special Rules & Est. of Minimum Wage Reg., Sec. 8(b)).

51. Page 49 Benefits communication

52. Page 50 Benefits communication Old approach New approach People get distracted and forget; repetition, across time, is vital Targeting fuels motivation and improves outcomes Wants are more important than needs Your “hero” is the customer, not the plan or program

53. Page 51 Selecting a benefits provider

54. Page 52 Selecting a benefits provider AT THE MEETING Assess your organization and needs so that they can recommend an appropriate benefits structure Explain in detail the costs, detailed benefits and admin options available Help you to implement the benefits plan

55. Page 53 Making benefits effective

56. Page 54 Making benefits effective Consider your objectives Tune into employees Agree your main message Develop a strong campaign concept Make it personal Communicate clearly and concisely Ensure data is up to Build momentum and launch with a bang! Follow up and send reminders

57. Page 55 Case study A

58. Page 56 Case study A

59. Page 57 Case study B-Oracle

60. Page 58 Case study B

61. Page 59 Conclusion & Questions

62. Page 60 Conclusion Summary Questions