Benefit Strategies Happy Holidays Logo

A Merry Message from Benefit Strategies Inc.

Happy holidays to you and yours from Benefit Strategies Inc.

We look forward to working with you in the new year and wish you joy and happiness.

A merry message Christmas from
Daryl, Tammy, Jennifer, Chloe, and Chelsey

Employees in a board meeting.

Employee Benefits vs Salary Increases in 2016

When it comes to employee benefits vs salary, as many as 79% of employees prefer the perks that employee benefits can bring over getting a pay increase, says a recent study shared by Benefits Canada.

This confirms what we already tell most of our clients here at Benefit Strategies – custom tailored benefit packages can be as good as gold and worth as much as (or better than) a pay raise.

Most Preferred Employee Benefit Options

Of the employees who said they preferred benefits packages vs salary, the survey inquired about what they want in workplace benefits and in perks. The leading types of employee benefits vs salary included:

  1. Healthcare insurance benefits
  2. Vacation/ Paid time off
  3. Performance bonuses
  4. Paid sick days
  5. Retirement Plan/ Pension benefits

Other Employee Benefit Preferences

The study also uncovered that not all employees prefer employee benefits over pay raises. Both gender and age affect the benefits vs salary preference.

GENDER – More women (82%) than men (76%) prefer benefits to pay raises.

AGE – Younger employees tend to have a higher preference towards employee benefits vs salary than older employees. For example, 89% of survey respondents between 18 and 24 years of age preferred benefits, while only 66% of employees between 55 and 64 years preferred benefits.

Takeaways for Your Alberta Business

Although this study was done on American employees, many parallels hold true for Alberta and Canada workplaces. In order to be a competitive employer and maintain your valuable employees you will need to make non-traditional compensation a priority.

It is also important to recognize that not all employees value employee benefits the same. This can depend on demographics, industries, and occupations. This is why Benefit Strategies Inc. offers Employee Benefit Audits to help employers determine what their employees will find most valuable.

Furthermore, as Benefits Canada points out, employers must do an exceptional job of communicating their non-traditional compensation, such as employee benefits and paid vacations.

Have More Questions About Employee Benefits?

At Benefit Strategies Inc., we can help you review and understand all the available competitive employee benefits packages and provide you with innovative employee benefits consulting to find what will best suit your needs.

If you have more questions about implementing or enhancing employee benefits at your company in 2016, please call our Edmonton Employee Benefits Broker at 1-780-437-5070, or contact us online for a free Consultation.

Street signs displaying Work & Retirement

New Trends in Retirement Plans in Canada

New trends in retirement plans are a challenge according to Human Resource consulting agency Morneau Shepell’s recent study called Trends in Human Resources. Not only do employers want to offer competitive retirement plans to their employees, but 21% also want to reduce both the costs and the risks associated with the retirement plans they offer.

DB and DC Employee Pensions Plans

Here are three trends in retirement plans that Canadian employers should understand.

DB Plan Sponsors – De-Risking Retirement Plans

A Defined Benefit Pension Plan (DBPP) is where the income received in retirement is pre-set and typically calculated using a formula that includes employee’s years of employment and earnings. The employer manages the assets and the employee will receive statements each year showing the total retirement benefits in the plan.

The study shows that there’s a new retirement planning trend for employers offering DBPPs:

  • 38% are reviewing their investment strategy
  • 38% are reviewing their plan design
  • 18% are considering converting their DB plan to a DC plan

DC Plan Sponsors – How to Make Retirement Income Adequate

A Defined Contribution Pension Plan (DCPP) is where the income received in retirement is based on the assets in the retirement account upon retirement. The employee determines where to invest contributions from a variety of investment options based on their risk tolerance and goals. Upon retirement the amount within your DCPP is based on contributions and the performance of earnings over the years.

According to the study, DC plan sponsors are looking at different ways to provide payment options for retirees who typically are left to search out investment products on their own.

Rather than letting retirees make poor or expensive decisions, 27% of DC plan sponsors are already providing payment options or seriously considering doing so.

By providing payment options, DCPP Sponsors can enjoy several benefits:

  • Reduced post-retirement investment fees, which will increase retirees’ income
  • Nurture an ongoing relationship with retired employees
  • Maintain assets and balances in the retirement plan in order to keep fees stable

Employers Also Considering Other Aspects of Retiree Benefits

In addition to improving the financial side of retirement for employees, some employers are also considering employee health:

  • 31% provided health benefits to retirees
  • 57% do not provide health benefits to retirees and have no intention to do so

These new trends in retirement plans reveal emerging options to provide for employees’ health needs well into retirement, with one option being a retiree exchange, which gives retirees access to benefits while keeping employers’ costs fixed.

For more information on emerging trends in retirement planning and on how to effectively implement or manage retirement planning within your employee benefits program, please contact our professional advisers at Benefit Strategies Inc. by calling 1-780-437-5070, or by filling out our online Contact Form.

See also, our blog article on the Realities of Retirement Planning in Canada.

Two generations talking about estate planning.

How to Talk About Estate Planning

Is Estate Planning the Elephant in the Room for Canadian Families?

Recent studies show that most Canadians are uncomfortable with talking about estate planning, finances and wills with their parents, families, and even professionals:

  • 47% of Canadians have never brought up the subject of inheritance with the people they want to leave money to
  • 79% have not consulted a financial advisor about the tax implications of wealth left behind

Source: BNN.ca

What You Need to Know When Talking About Estate Planning

The importance of wills and estate planning cannot be understated and there are several essential reasons why Canadians need to get over their awkwardness talking about estate planning with their families and with a professional Estate Planner.

For instance, do you know how to:

  • Allocate different types of assets to different people, depending on their relation to you?
  • Use Tax Free Savings Accounts as a tax shelter?
  • Appropriately use Trusts to avoid awkwardness and distrust among siblings?
  • Use Charitable Giving to enjoy tax benefits?

Once a professional estate planner has helped you with your estate planning and you are comfortable with your finalized will, it is equally as important to discuss these matters with family members and anyone else included in your will.

Talking about estate planning openly gives you an opportunity to explain to your heirs the reasons for why your will is set up the way it is, which can help prevent family legal disputes after your passing. You can also help your heirs understand the value of your inheritance in hopes they will be fiscally responsible with the inheritance they receive.

Estate Planning Tips

Here are a few simple tips on how talking about estate planning with your loved ones and heirs can help:

  • Talk often about smaller, less important matters so that everyone will become more comfortable with the topic.
  • Choose the right setting for your personal family dynamics, whether it is an impromptu casual setting or a formal discussion facilitated by your estate planner.
  • Communicate the contents of your will and estate plan in a group setting, with everyone present, stating your reasoning behind the way you have set up your will.
  • Use your own judgement in discerning how much information you should disclose to your heirs, depending on their maturity level and stage of life.
  • If you have a spouse, make sure you are on the same page, and you are both involved in the conversation.
  • Anticipate questions you think your children or heirs may have, and be prepared with well thought out answers.
  • Dream big and discuss your intended legacy with your heirs. While you can’t dictate what your children or heirs will do with the inheritance you have left them after you pass, you can work to instill common goals when it comes to spending, saving, and giving, in order to pass on a legacy through generations to come.
  • Be sure to ask the heir(s) how they feel and to air any concerns they may have. Give them a chance to be heard, even if you do not intend to change your will.
  • Make it clear that your will may be an ongoing discussion because a lot can change, especially if you are still young and healthy.

Still Have Questions About Wills and Estate Planning?

If you still feel you have unanswered questions about will preparation and estate planning and you need assistance please call our Edmonton office at 1-780-437-5070 to speak with one of our Executive Benefit Strategies advisors or use our online contact form to request a free Consultation.

Computer showing Insurance Policy graphic

Canada Critical Illness Insurance – FAQ

The purpose of this critical illness insurance FAQ blog post by Benefit Strategies, is to offer answers to some very basic questions that most Canadians have on this subject.

A critical illness insurance policy helps pay costs associated with a life-altering illness and is received as a lump sum cash payment. Essentially, a critical illness insurance policy helps you recover from a serious illness, condition, or disease, while maintaining your family’s lifestyle and financially stability.

For more information outside of this critical illness insurance FAQ, please contact our Edmonton Benefits Brokers directly at 1-780-437-5070.

Frequently Asked Questions

What is a critical illness?

Each critical illness insurance policy is unique but common critical illnesses may include:

  • Heart Attack
  • Stroke
  • Life threatening cancer
  • Major organ transplant
  • Total deafness or blindness
  • Loss of speech
  • Severe burns
  • Parkinson’s Disease
  • Alzheimer’s Disease

Why do I need critical illness insurance?

A critical illness insurance policy will ensure that you have the financial resources should you get sick and are unable to earn an income for any period of time.

Here are just four ways a Canada critical illness insurance policy could help you:

  1. Pay for financial obligations – Including you mortgage, car payments, credit card debt, and so on.
  2. Keep your independence – Make any modifications to your home or vehicle, or hire a caretaker to help.
  3. Pay for medical services – Help offset costs for medication or treatments not covered by your Provincial Healthcare provider.
  4. Relieve the pressure – Gives you the freedom to spend your time however you think may be most conducive for recovering, including spending time with family.

Is critical illness insurance worth it?

The answer to this question is personal. Everyone places a different value on their peace of mind, knowing they are financially secure in the event of becoming sick or incapacitated. Other people may prefer to forego insurance premiums and would rather save up a rainy day fund to cover critical illness expenses, should they occur. When deciding how you feel about critical illness insurance keep in mind that most Canadians have a reasonable probability that they will develop a critical illness by the time they are 65.

What affects critical illness insurance cost?

There are a number of considerations that can affect the cost of critical illness insurance rates:

  • Pre-existing conditions
  • Age
  • Gender
  • Amount of coverage
  • Smoking and drinking status
  • Health history
  • Current health
  • Occupation
  • Family History

Can I get combined life and critical illness insurance?

Many Canadian insurance companies offer disability insurance and critical illness insurance together. These bundled or combined disability and critical illness insurance policies can often help you save money over time.

What’s the difference between disability and critical illness insurance?

There are three main differences between disability and critical illness insurance:

  • Critical illness insurance pays out as a lump sum and typically sooner than disability insurance.
  • Critical illness does not require proof of income while disability insurance does.
  • Critical illness insurance policies are typically less expensive than disability insurance.

Disability insurance protects your income against the risk of a disability that would prevent you from working. Disability insurance will only pay out a portion of your income, until you are able to return to work.

Critical illness insurance however, pays the benefit after a diagnosis of a serious life-altering illness, regardless of whether you have a current income or not, or if you are able to work or not.

Is critical illness insurance taxable?

A critical illness insurance benefit payout is usually not taxable and comes in the form of lump sum payment, for you to spend in whatever way you wish.

Furthermore, any employer-paid critical insurance premiums are not a taxable benefit to the employee.

Do You Still Have Questions?

At Benefit Strategies Inc., critical illness insurance is just one aspect of our executive benefit solutions to help balance the benefit requirements of owners and managers.

If you have more questions that this critical illness insurance FAQ couldn’t answer, please call 1-780-437-5070 to speak with one of our executive benefit advisors today, or contact us online for a free Consultation.

Street signs displaying Work & Retirement

The Realities of Retirement Planning in Canada

According to the recent RBC poll on Retirement Myths & Realities, Canadian’s expectations of retirement planning in Canada and the reality of their actual retirement objectives and goals have many major conflicts.

Here are some highlights from the poll that compare retirement planning “Expectations” with “Reality.”

Social Time Missed More Than Regular Paycheques

Expectation: Nearly half of the Canadians polled say they will miss their paycheques after retirement, when in reality, only about 26%1 say they do.

Reality: What Canadians actually miss most after retirement is the social interaction with co-workers – in fact, over half of retired Canadians say they miss the social outlet more than they miss their paycheque.

Time For Self Tops Travel Expectations

Expectation: The top expectation of how Canadians think they will spend their time after retirement is doing more travel.

Reality: In reality, as many as 7 out of every 10 Canadians say they travel less and actually spend more time “taking time for myself.”

Most Canadians Don’t Choose Their Retirement Date

Expectation: Approximately 80%2 of Canadians think they will choose their own retirement date.

Reality: The facts reveal however, that as many as 43% of Canadians won’t get to choose their retirement date.

  • 48% of Canadians retire earlier than expected
  • 46% of Canadians retire when expected
  • 6% of Canadians retire later than expected

There are several reasons for this including health, costs of living, the need to take care of a loved one, or depending on the employer’s request.

Canadians Worry About Financial Costs After Retirement

If you are worrying about how you will pay all your bills while supporting your lifestyle after retiring you are not alone.

Expectation: Just less than half of the Canadians polled (48%) say they worry about their money lasting their lifetime.

Reality: In reality, Canadians vary on how they feel about their financial position:

  • 38% feel they have enough to do everything they want
  • 44% feel they can live comfortably but without room for the “extras”
  • 18% feel they are just making ends meet

Retired Canadians Will Spend Around $2400 Per Month

Retired Canadians need approximately $28,8003 per year after retiring. This total retirement income includes:

  • Living expenses
  • Food
  • Travel
  • Entertainment
  • Medical expenses

Many retired Canadians also take on extraordinary purchases during retirement including buying a new vehicle, renovating their home, or giving large amounts of money to family members.

Why Is Retirement Planning in Canada Important?

Retirement represents an important life event that you need to seriously think about and prepare for.

Whether your retirement comes exactly when you expect it to or if you should retire earlier or later than expected, the fact of the matter is, you should work with a chartered retirement planning counsellor that can provide you with good solid advice.

Are you a baby boomer nearing retirement and needing some more concrete answers about financial retirement planning in Canada? Let us help you understand why retirement planning is important.

Call Edmonton’s Benefit Strategies at 1-780-437-5070 to speak with one of our retirement planning counsellors and advisors about early retirement planning for small business owners or for individuals.

Businessman with his finger on the word BENEFITS

How Are Benefit Brokers Paid?

A common question we get asked is, “How are Benefits Brokers paid?

Benefit Strategies has been helping employers with benefits management services for over three decades and this question is more common than you might think. Call 1-780-437-5070 to speak with one of our Benefit Brokers today.

Our potential clients are often curious at how we get compensated for researching, recommending, and implementing a workplace benefits plan for employees. There are two basic pricing models that can be followed:

  1. Commissions Based Compensation
  2. Fee Based Compensation

Commissions Based Benefits Brokers

The majority of benefits brokers in Edmonton (and Alberta) are commissions based. This means they are paid a small percentage of the premiums paid to the insurer. This is usually built right into your benefits premiums. Commissions can vary from flat to graded rates depending on the insurance company.

  1. A flat rate commissions based benefits broker simply receives a percentage that does not vary with usage or time of use.
  2. A graded rate commission varies by dollar amount, for example:

12.5% for the first $5,000
9% for the next $69,000
7.2% for anything beyond $75,000

Fee Based Benefits Brokers

Fees based benefit plans are typically used for larger client accounts where an hourly fee for brokerage services is more appropriate. Any fees based plan is approved in writing prior to any charges. Sometimes Commissions and Fees Based pricing are used together.

Other Ways Benefit Brokers Are Paid

Contingency Income – A criteria based fee structure is what we call contingency income. Many benefits brokers will have this type of contingency income arrangement with any insurer that qualifies them for payment once certain criteria are met. This is normally calculated on an annual basis.

It can be hard to pinpoint how much your specific policy may help your broker earn. In general, contingency income payments depend more on the overall performance of the broker and their ability to keep their clients happy, rather than selling one specific employee benefits plan.

Supplemental Commissions – These are becoming more common and are starting to replace contingent commissions in some instances. Supplemental commissions are “fixed payments” established annually, based on historic performance. In the employee benefits industry, benefits brokers refer to these as “Guaranteed Supplemental Commissions” or GSCs.

From time to time, employee benefits brokers can also receive alternative compensation and benefits from insurance companies in the form of promotional events, products, training, and so on.

Our Edmonton Benefits Broker – Worth Every Penny

A good benefits broker will truly add value to your employee benefits plan.

At Benefit Strategies Inc., and at other trusted Alberta brokerage firms, you can expect your benefits broker to help with:

  • Presenting your workplace benefits plan to various insurance providers
  • Comparing the Pros and Cons of various employee benefits plans
  • Setting up the chosen benefits plan
  • Negotiating employee benefits plan’s renewal

Above and beyond services that we offer may include customizing communication for your staff (and raising awareness for the employee benefits plan), help with cost containment, and compare your benefits plan against other employers in your industry.

You can also complete our quick Contact Form through our website to get in touch with us.

Contact our Employee Benefits Plan Brokers

If you have more questions about how our benefits brokers are paid or wish more information about employee benefit plans call Benefit Strategies at 1-780-437-5070 or us an Email.

Young professional millennials smiling.

Why Employee Benefits Are Important

Do you know why employee benefits are important?

If companies do not offer benefits as part of their overall attraction and retention strategy, what type of employee are they looking to attract? Most companies are looking to hire young, long-term employees they can build the future growth of their organization around and vice versa.

What are these employees looking for? Whatever it is, you can best believe they know why employee benefits are important. Hays 2014 Compensation, Benefits, Recruitment and Retention Guide says that when a candidate makes the decision to accept or decline a position, nearly 20% of that decision is based on the benefits they are offered.

Employee benefits are important and are becoming the new standard among employers seeking talented individuals in today’s job market. With growing families, employees want a health and dental plan along with the security of disability benefits and life insurance. However, it doesn’t stop there. Employers are tuning in to why employee benefits are important and offering other incentives including the following:

  • Performance bonuses
  • Group RRSP or Pension Plan employer match
  • 2 weeks vacation
  • Flexible work schedule
  • Ability to work from home
  • Healthcare Spending Account

Today, in Alberta’s economy, many employers struggle to find employees from a shrinking talent pool. To be competitive in recruiting the top talent the report recommends small companies focus on promoting cost-effective benefit plans, Healthcare spending accounts, Group RRSP contributions, Workplace Flexibility, and opportunity for advancement.

To find out more, call your Benefit Strategies broker at 1-780-437-5070.

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Benefit Strategies in Capital Ideas Edmonton

[vc_row][vc_column][vc_column_text]What’s your biggest customer service challenge?

Chelsey Smith, marketing and communications director at Benefit Strategies Inc., recently shared her biggest customer service challenge at Capital Ideas’ Earned Media Workshop, which kicked off E-Town on September 11.

“The biggest challenge is keeping lines of communication open with companies – we rely on working hand-in-hand with human resources. It is often frustrating for employees to try to communicate with designated toll-free lines, or troubleshoot independently. We can alleviate that frustration, and provide a transparent and timely response.”

Here’s a snapshot of the publication with all the responses from entrepreneurs on what they’ve learned about serving customers well.

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Are you looking for a better experience when it comes to selecting and managing employee benefits in your workplace? Contact our Edmonton employee benefits broker at 780-437-5070 or arrange a free Consultation online.

We’ll help alleviate your frustration and provide the transparency Chelsey describes as part of our customer service experience.[/vc_column_text][/vc_column][/vc_row]

Employees in a board meeting.

When Should Your Key Employees Start Saving for Retirement?

If your key employees are like most other Canadians they are saving for retirement and dreaming of the day they retire.

Pursuing leisurely activities such as travel, hobbies, volunteering, and spending more time with friends and family are likely at the top of their list when they are no longer tied up by the responsibilities of work. But without a steady paycheque will they be able to support their leisurely lifestyle – and what about unexpected expenses such as health bills?

This is why employee benefits and retirement planning is a must in order to make saving for retirement a possibility. Retirement planning is also a key Executive Benefit that your company can offer to help attract and maintain key employees within your workforce. Most employees find Retirement Plans important as many are not in the habit of regularly putting aside money for retirement.

Your employees also deal with the many costs of living expenses such as mortgages, education, raising children, food, and other unexpected expenses that often get in the way, preventing employees from properly saving for retirement, especially during their earlier years in the workforce.

The important questions then become paramount:

  • When should your key employees start saving for retirement
  • And how can you, as their employer, help with their retirement planning?

Here are three critical pieces of advice we’ve put together to help you explore the topic of employee benefits and retirement planning.

1. Help Employees Develop Good Retirement Saving Habits

Starting to save for retirement at a young age (even in very small increments) can help establish good lifelong saving habits.

Even though many employees find it much harder to actually do it, most do understand that every penny set aside for retirement early on definitely helps, allowing for the benefits of tax-savings and compounding interest.

As an employer, you can empower your key employees to start saving (even if it’s only small) for their future.

2. Keep Your Employees Informed with Retirement Planning Information

Your employees can also benefit from proper information and education in regards to saving for retirement. The big question for many Canadians is how much money will they actually need to retire? Helping them start to understand this number (and how they can achieve it) can help ease their worries and set them on the correct path of retirement planning.

The following outlines several factors that go into the financial influences that affect retirement savings. A good employee benefits and retirement planning specialist can help explain and incorporate these into an effective Retirement Plan:

  • Lifestyle choices
  • Monthly and annual expenses
  • Any additional accumulated savings
  • Any monthly pension income (through private or government sources)
  • Expected investment rate of return
  • Rate of inflation

Your company’s Employee Benefits Planner can provide useful retirement planning tools and can even advise you on the best ways to inform your workforce on retirement best practises.

3. Help Employees Plan for Retirement within 10 Years of Retiring

There are so many unknowns in your twenties and thirties that it can be hard to establish a formal retirement plan. Some of these unknowns include health, value of assets, rate of inflation, rate of return, and so on. This is why many retirement strategists will recommend that a formal retirement savings plan can come later in life when you are closer to retiring.

A general rule of thumb many people follow is to start seriously thinking about their retirement plan approximately 10 years before retiring and to formalize an official retirement plan 5 years before retiring.

This is when your company’s Employee Benefits Planner can step in and work with employees nearing the end of their career. Professional advice, accurate number crunching, and support through the retirement transition are very valuable to those gearing up to retire. For more information, call us at 1-780-437-5070.

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