Compensation & Benefits Review current issue

Currents in Compensation and Benefits

Hansen, F. — Mon, 23 Nov 2009 15:53:35 PST

Rewards Communication in Australia and the United States: A Survey of Policies and Programs

Shields, J., Scott, D., Sperling, R., Higgins, T. — Mon, 23 Nov 2009 15:53:35 PST

Human resources (HR) and compensation professionals in Australia were surveyed to determine how they communicate rewards information to employees. The rewards communications survey examined five reward components: organization reward strategy and philosophy, base pay, base-pay increases, short-term variable pay and benefits. This research found that HR and compensation professionals believe that rewards communication is important, even to the degree that it affects organizational performance, employee satisfaction with pay, employee retention and employee motivation. They also believe that most employees have limited understanding of the purpose of reward programs and how they work; in fact, many do not understand aspects of the pay system that directly affect them such as pay ranges, average pay rates and performance targets. Comparisons between Australian and United State reward communication policies and practices are reported.

The Evolution of Employee Benefits at the Economical Insurance Group

Hubbard, J., Singh, P. — Mon, 23 Nov 2009 15:53:36 PST

Employee benefit plans can be an important part of an organization’s employment deal and can help differentiate one employer from another. This article defines employee benefits as an extensive offering of programs that is broader than the conventional definition. Not only does it include traditional benefits; it also includes pension and savings, time off work, wellness and flexible work arrangements. The article reviews one company’s experience as its employee benefit program has evolved from one of fixed and defined benefits to one that provides greater choice, flexibility and control to better support the organizational and human resource strategy and to better meet the needs of its diverse workforce. Several lessons have been learned by this company and are shared in this article. Although the company has focused on continual improvement of its employment deal over the past several years, it cannot halt the progress it has made thus far.

Trends and New Developments in Automatic Enrollment for Defined Contribution Plans

Morgenthaler, D. M., Weyeneth, J. A. — Mon, 23 Nov 2009 15:53:36 PST

Automatic enrollment can boost employee participation in a Section 401(k) plan, making it easier for the plan to satisfy nondiscrimination requirements that often prevent highly compensated employees from maximizing deferral contributions. The Pension Protection Act (PPA) and recent IRS regulations expand the automatic enrollment design options available to employers and provide additional incentives to adopt automatic enrollment arrangements. Employers with automatic enrollment arrangements should be aware of these new developments and should review their plan documents and administrative procedures to ensure compliance with current requirements. Employers considering automatic enrollment should be aware of the three types of automatic enrollment now available under PPA. This article summarizes the evolution of automatic enrollment, the three types of automatic enrollment authorized by the PPA, the IRS guidance that governs qualified automatic contribution arrangements (QACAa) and eligible automatic contribution arrangements (EACAs), and the planning considerations for employers.

Accessing the Impact of Regulatory and Statutory Changes to the Family and Medical Leave Act

Colopy, K., Dielman, S. — Mon, 23 Nov 2009 15:53:36 PST

In 2008, Congress amended the Family and Medical Leave Act (FLMA) by the enactment of the National Defense Authorization Act. Consequently, there are now two more qualifying reasons for protected leave under the FMLA with accompanying definitions and procedures relating to what is now informally referred to as "family member military leave." Not only has the law expanded to include additional protected leaves of absence, but the DOL also revised its FMLA regulations in 2009 with a result of dramatically changing various aspects of administration of the law for both employers and employees. As a result of all these changes, employers are now operating in a significantly different legal and regulatory arena as it relates to the FMLA. This article highlights some of the more significant changes that will require thought and action on the part of employers as they consider how best to operate under this new statutory and regulatory landscape.

Lifestyle Behaviors: Evaluating Behaviors That May Justify Increasing the Employee's Cost for Employer-Provided Health Insurance

Hughes, R. E. — Mon, 23 Nov 2009 15:53:36 PST

Responding to the increasing cost of employer-provided health insurance, some employers have instituted a number of cost-savings efforts such as reduced benefits, limited access, increased copayments, differential premiums and wellness programs. Of interest in this article are cost abatement efforts that focus on lifestyle behaviors that can adversely influence insurance costs. If such efforts are to succeed, it will require employee acceptance of these efforts. This article presents information that identifies lifestyle behaviors that might reasonably receive support for such differential treatment.

Consumer-Driven Health Plans: Employer Take-Up and Average Contributions

Cress, J. R. — Mon, 23 Nov 2009 15:53:36 PST

In an era of rising health care costs, employers seek cost reduction strategies, with many relying on consumer-driven health plans (CDHP). Utilizing data from a nationally representative survey of firms, this article explores employer experiences with CDHP in two areas. First, it describes those firms most likely to offer CDHP. Second, it estimates potential cost reductions from an emphasis on CDHP. Results indicate that large, nonunion employers offer CDHP most often. Furthermore, an emphasis on CDHP plans is not associated with a reduction in average contributions to insurance policies.