Comp & Benefits Savings?
SamanthaQ
83 Posts
Hello fellow forumites! We are a not for profit and have been challenged by our board to come up with a plan to reduce compensation and benefits costs next year. I am putting together some ideas but wanted to know if you have any good or creative ideas? Here's what we have for benefits:
PTO Time
Sick Time (paid at 85% of base)
LTD
Life Insurance 2x salary
Medical Insurance for Employee only (fully paid)
Defined Benefit Pension Plan
401k Plan
Wellness Plan (reimburse up to $150 in out of pocket medical per year)
I've listed things such as offering base plan for medical and employee cost shares for premium plan, eliminate sick time and self fund a STD policy, deposit additional funds to Defined Benefit Plan, eliminate the wellness plan,etc..
Any ideas? I look forward to your thoughts!
PTO Time
Sick Time (paid at 85% of base)
LTD
Life Insurance 2x salary
Medical Insurance for Employee only (fully paid)
Defined Benefit Pension Plan
401k Plan
Wellness Plan (reimburse up to $150 in out of pocket medical per year)
I've listed things such as offering base plan for medical and employee cost shares for premium plan, eliminate sick time and self fund a STD policy, deposit additional funds to Defined Benefit Plan, eliminate the wellness plan,etc..
Any ideas? I look forward to your thoughts!
Comments
Also, you could begin buying life insurance at one time the annual salary and instead, offer a 'guaranteed issue' group life plan to your employees. It's very inexpensive, they can purchase as much as they like, and it's convertible when they separate employment. Much better than term life that drops at separation.
You may look into a deferred compensation type of retirement that's a defined contribution; however, this would depend on the nature of your employees and whether or not they'll want to invest their money. Defined contribution is MUCH better for the employer and can be for the employee if they know how to use it.
If I think of any more, I'll jump back in here.
"Sam"
The life insurance change that smoll stated probably will have the least overall impact and will allow cost savings.
I think your going to have to take a hard look at restructuring your health insurance. That is probably where you can save your biggest dollars.
Self-funding your STD may also be a good idea. We self-fund ours. We pay it out of payroll, but have Jefferson Pilot administer an advice to pay system. It weeds out abusers. If you write the plan correctly, you don't have a huge liability for STD.
One of the reasons benefit plans can be viewed as generous in the non-profit world is because the wages are often a bit below market rates for similar jobs in the private sector. We tend to make up for it by offering more holidays and heftier time off, plus a great health plan.
Just holding the line on health care costs would be a savings and your wellness plan contributes greatly in that area.
We are fairly strong financially and some of the staff is very savvy to that and my concern is morale if we cut too much.
If you have a funding shortfall somewhere, look very closely at the programs having the difficulty. Cutting costs is never easy and is always emotional, but if you identify the amount and it's duration you have something to work with. As the Finance guy in our shop, I would require the board or our finance committee to be very specific about their desire to cut costs before embarking on some vague mission to save dollars. You must know where this is coming from before you can effectively address meaningful savings.
Even sharing a small portion at first will let employees know this is the wave of the future.
Don't disband your wellness program. Healthier lifestyles tend to keep premium increases down because of lower utilization rates.