Benefits

Question 1

Voluntary benefits offered may take in the form of:

Answer 1

1) Extended Health (e.g. drug plans and travel insurance)
2) Income Security (e.g. life insurance and illness leave programs)
3) Retirement Income (e.g. pension plan and group savings plans)

Question 2

Financial Considerations

Answer 2

► voluntary benefit plans are additional to any legislated benefit that the organization is required to fund
► represents significant costs & long-term promises

• full set of benefit plans (legislated and voluntary) may add up to 25% of payroll (or more)
• the voluntary benefits comprise about 80% of that cost

► because of this cost & commitment –> benefit plans must be thoroughly aligned with the organization’s Total Reward’s Strategy

Question 3

Tax Considerations

Answer 3

tax treatment of employee benefits varies with each plan

Some:
► when received, are subject to income tax (such as employer-paid sick leave)
► Employer contributions can also be subject to income tax (for example, the employer-paid portion of basic life insurance).
►receive favorable tax treatment (health and dental, pensions).

Question 4

3 larger categories of benefits are:

Answer 4

1. Income Security - i.e. income continues in light of an accident, illness, vacation, leave, or retirement.
2. Health care / Well-being - i.e. expenses are covered for health services and medical devices.
3. Lifestyle and General Living - i.e price reductions on company products or access to reduce rates for transportation and other consumer insurances (e.g. vehicle and home insurance)

Question 5

Legislated benefits (list):

Answer 5

• CPP
• Statutory Holidays
• EI
• Vacation
• WCB

Question 6

Voluntary Benefits;

Answer 6

Health, dental, life disability, retirement, and perks

Question 7

Total Rewards:

Answer 7

• Cash / Salary Compensation: base pay, pay adjustments, incentives.

• Benefits: life, health, disability, retirement income, perks, and allowances, work-life
considerations.

• Relational Returns: recognition, status, security, challenging work, learning opportunities.