Challenges in administering a Flexible Benefits Plan
Adverse Selection Problem
Complicated to administer
Low Utilisation Rate
Types of flexible benefit plans
Employees purchase additional or improved benefits through payroll deduction.
employees choose among pre-designed benefit packages
Employees claim any benefits under a specific amount of money that is given to them by the organisation.
Steps in administering a Flexible Benefits Plan
Step 2: Developing and Implementing the Flexible Benefits System
Step 3: Fine-tuning of Flexible Benefits System
Step 1: Information/Data Collection
Disadvantages and Advantages of Flexible Benefits Plans
Better Morale and Job Performance
Recruitment and Retention Advantages
Extra cash in hand for employees
Control of Benefits and Expenses
Potential for employees to Lose Money
Lack of Portability
Difficulty in Sharing Information
Benefits to include in a flexible benefits plan
Additional attractive benefits
Holiday and fitness expenses
Payment of children's education
Considerations in implementing a Flexible Benefits Plan
Issues that will impact the organisation
Age and Demographics of Employees
Evaluation of Effectiveness of Flexible Benefits System
Staff Satisfaction Surveys
What are Flexible benefits plans?
Benefit plans that allow employees to choose their own benefits from a set range of benefits offered. With a flexible benefits budget they can “purchase” the benefits they want.