September 9, 2010
Canadian Employers Committed To Offering Employee Benefits, Helping Their Employees Achieve a Secure Retirement and a Healthy Life
New Survey Examines the Employee Benefits Offered in Four Types of Canadian Organizations
Brookfield, Wis.—A new survey published by the International Foundation of Employee Benefit Plans looks at employer-provided employee benefit plans in Canada and offers a snapshot of recent trends in extended health care plans, retirement plans and other benefit offerings.
The survey examines four types of Canadian organizations—corporations, professional service firms, public employers and multiemployer plans—and finds employers committed to offering benefits that will increase their employees’ quality of life and help them plan for a secure retirement.
“Employers have found that a good employee benefits program can contribute to employee retention and satisfaction,” says Julie Stich, Senior Information/Research Specialist at the International Foundation. “With that in mind, employers are focused on providing the benefits that will be the most valuable to their employees without breaking the bank.”
Key Retirement Findings
The survey found that more than half (56%) of employers offer a defined benefit (DB) pension plan that provides employees with a guaranteed monthly income in retirement. As expected, this type of plan is more common among multiemployer plans (87%) and public employers (86%).
About the same proportion (53%) of employers in the survey, offer a defined contribution (DC) plan (also known as a capital accumulation plan). This option is most common among professional service firms (70%) and corporations (63%). Most employers offering a DC plan report offering matching contributions—93% of corporations, 90% of professional service firms, 86% of public employers and 67% of multiemployer plans.
In recent years, a number of automatic features have been introduced to increase employee participation in DC plans and to help employees manage their plan investments. The survey found that three in five employers (61%) use automatic features in their DC plan. Among these employers, 58% provide target-retirement-date investment funds and 56% use automatic enrollment.
“Employees may be unaware of the importance of saving for retirement at an early age or don’t consider saving a priority when paychecks are stretched thin. Automatic enrollment provides the first step toward building a retirement income and few employees opt out of plan participation once they’re enrolled,” says Stich.
Additionally, over half (58%) of employers surveyed report taking steps to help their employees save by offering retirement planning or counseling programs.
Key Health Care Findings
Almost all employers surveyed (97%) offer an extended health care plan to their employees. Slightly more than half (54%) of these employers pay the full premiums for their employees. Of the organizations requiring employees to share the cost of the premium, the most common amounts employees pay is between 16% and 20% or between 41% and 50%.
“Employers across Canada have implemented a number of techniques in recent years to manage rising costs for extended health care plans and prescription drug benefits. One trend is to try to reduce costs through wellness initiatives such as health risk assessments, fitness programs or weight-loss competitions. Employers hope that implementing wellness programs will not only enable their employees to live healthier lifestyles but will also help their bottom line,” explained Stich.
Eighty-four percent of employers surveyed report taking some kind of action to lower the costs of providing an extended health care plan. These efforts include annual and/or lifetime maximum benefit limits (94%), reasonable and customary fee schedules (80%), health care claims utilization analysis (76%), and two tiers for cost sharing (59%). Wellness initiatives have been implemented by a large percentage of corporations, professional service firms and public employers (70%, 70% and 80%, respectively), but are much less popular among multiemployer plans (10%).
Nearly all employers, 98%, report offering prescription drug benefits and most (89%) have implemented cost-management techniques specifically for these plans. Popular cost-management strategies include three-tiers for cost sharing (60%), mandating the use of generic drugs when available (60%), discontinuing or limiting coverage of lifestyle drugs (48%), and drug formularies (45%).
Almost all employers surveyed, 96%, offer dental benefits to their employees. Of these, 55% do not require employees to contribute toward the cost of dental insurance premiums. Slightly more than four in five organizations, 83%, do not impose a deductable.
Key Other Benefit Findings
Almost half of employers, 47%, offer voluntary benefits for which employees pay the benefits’ full costs. Among these employers, life insurance is the most common offering (90%), followed by accident insurance (43%), and critical illness or cancer insurance (36%).
About two-thirds of employers (63%) offer survivor benefits such as extended health care continuation for dependants; payout of accrued vacation, sick time or other paid time off; or access to an employee assistance plan.
Nearly all corporations, 93%, offer paid vacation benefits, as do 71% of professional service firms and public employers. A typical vacation schedule gives 15 days after five years of service, 20 days after 10 years of service, and 25 days after 20 years of service.
Seventy percent of employers offer work/life benefits. Among these, the most common benefits offered are flexible work hours/compressed work weeks (80%), paid parental/family leave (61%), telecommuting (59%), adoption leave (45%) and job sharing (38%).
About The Survey
Employee Benefits Survey: U.S. and Canada 2011 was conducted by the International Foundation of Employee Benefit Plans in March and April 2010. The survey results include responses from individuals representing four types of organizations in Canada and the U.S. For the purpose of this survey types of employers are defined as follows:
Corporations– Single employers, including both publicly traded and private organizations
Professional service firms – Accountants, actuaries, administrators, attorneys, bank and trust companies, consultants, insurance companies, investment advisors, etc. who serve the employee benefits industry
Public employers – Municipalities, counties, states, provinces and federal governments
Multiemployer benefit plans – Benefit plans maintained under one or more collective bargaining agreements to which more than one employer contributes and governed by a joint board of trustees consisting of equal representation from labor and management
Individuals surveyed were members of the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.
Employee Benefits Survey: U.S. and Canada, 2011 (Item #6924) is published by the International Foundation. The 100-page survey costs $89 ($60 for Foundation members). To order visit www.ifebp.org/books.asp?6924 or contact the Foundation Store at firstname.lastname@example.org or (888) 334-3327, option 4.
The International Foundation of Employee Benefit Plans is a nonprofit organization, dedicated to being a leading objective and independent global source of employee benefits, compensation, and financial literacy education and information. Total membership includes 36,000 individuals resenting 4,800 multiemployer trust funds, corporations, public employer groups and professional advisory firms throughout the United States and Canada.