In honour of Benefits Canada’s 35th anniversary, we took the opportunity to go back to the source to explore why employers offer employee benefits programs.
Our research looks at the past, present and future of employee benefits—and shows how much senior business leaders value them.
Cost concerns and the desire to more directly connect investment dollars with outcomes are also driving a trend toward greater flexibility and consumerism.
Survey respondents say the No. 1 way that employees’ needs have changed benefits in the past 35 years is the demand for flexibility (28%). It’s no surprise, then, that 35% of senior decision-makers expect that pension and/or benefits plans will offer more choice and customization for employees going forward.
Costs in context
Justifying the investment
Educating for engagement
The advisor’s role
Will the PRPP matter?“We’re moving to a more DC-style with health benefits,” says Marilee Mark, vice-president, marketing, group benefits, with Manulife Financial. “The desire for cost containment and the demographics of workplaces today are driving the need for more flexibility.”
Since sponsors value their plans, cutting isn’t an easy out anymore. When cuts are necessary, they may be replaced with another vehicle, such as a healthcare spending account, which allows employees to maintain the benefits they want while forcing them to prioritize their needs.
Putting decision-making responsibility into the hands of employees makes them more responsible consumers.
“Flex plans drive consumer behaviour,” affirms Mark, who expects to see plan sponsors making recommendations on where to go to purchase benefits as a way to encourage smarter shopping for cost containment.
“Those insured under the plan can have a direct impact on the bottom line by simply asking the right questions when, say, getting prescriptions. Asking for generics will contribute to the sustainability of the plan,” says Matthew Rotenberg, manager, marketing communications, group products, with Standard Life. “This is particularly important for smaller plans, as there is a smaller pool [across which] to spread the rapidly increasing costs.”
The demand for flexibility also exists on the retirement side.
“Although DB plans still dominate the assets, there is a trend toward DC because of the flexibility of employer contribution arrangements and the ability to contain costs,” says Michael Ondercin, assistant vice-president, product marketing, group retirement solutions, with Manulife Financial.
As DB plans improve their funded status after the challenges of the 2008 financial crisis, Ondercin says he expects more plan sponsors will move away from the risks and management attention requirements of DB so they can focus more on their core business.
Leigh Doyle is a freelance writer based in Toronto. leigh.doyle@gmail.com
Get a PDF of this article and other special coverage of Benefits Canada’s 35th anniversary.