Benefit Awareness

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Benefit Awareness Multi-national Schemes

• Gerard Baltazar Paddy Wright

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Agenda

• Overview of benefits
• Benefit comparisons between Russia and UK
• What you can do
• Multi-national schemes
• Income protection plan
• E-Benefits
• Flex-Benefits
• Future of Compensation Benefits in Russia

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Labour market in Russia

• Russian economy is growing
• Increasing foreign investment
• Difficult to attract and to retain highly
  qualified staff
• Average salary for highly qualified staff is
  increasing
• Staff turnover is high

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Compensation Benefits
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Compensation Benefits

• a mechanism to attract and to retain skilled
  staff

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Compensation Benefits

• a mechanism to attract and to retain skilled
  staff
• employees are one of the most important assets
  in an organisation

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Compensation Benefits Package
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Compensation Benefits

• It is NOT about giving more benefits. Its about
  HOW you give it
• Effective Communication is the key

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Research figures

• Top 5 reasons for changing employment
• Uncompetitive salary
• No recognition of ability
• No career prospect
• Unsatisfactory working environment
• Lack of interest in the job

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Research figuresTop 10 reasons for not leaving

• Job satisfaction
• Competitive salary
• Job security
• Flexible working hours
• Working environment

• Career development
• Training programs
• Benefit packages
• Work-life balance
• Loss of benefits if employee leaves

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Benefits Comparison between Russia UK

• Russia
• Health insurance 94
• Sponsored meal 72
• Accident insurance 62
• Income protection plan N/A
• Life insurance 53
• Pension 13
• Childcare 0

• UK
• 58
• 7
• 19
• 42
• 81
• 80
• 4

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Reward_at_5to6Years
Training
Insurance
40-50 of Base
Bonus
Overtime Allowances
Base Pay
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Further focus

• Multi-national Schemes
• Income Protection Plan
• Pension Scheme
• E-benefit
• Flexible benefits

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Multi-National Scheme
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Multi-National Scheme

• an arrangement between multinational employer
  and insurer who can offer a group scheme under
  one umbrella for all offices worldwide

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ABC Ltd - Global Network
CIS CEE W Europe F E Asia Americas Russia Pola
nd UK India USA Kazakhstan Czech Germany China Ar
gentina Ukraine Hungary France Hong
Kong Brazil Kyrgyzstan Romania Italy Malaysia Me
xico Georgia Bulgaria Belgium Singapore Venezuela

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Multi-National Pooled /Profit Share Scheme

• Employer pays the premium
• Proportion of profit is returned in case of
  positive claim rate.
• Negative balances are absorbed by the insurer.
• Losses may not be carried forward to the next year

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Multi-National Pooling Example

• Total premium - 2,500,000
• Less Admn. charges - 250,000
• Stop loss charge 50,000
• Reinsurance charge 100,000
• Less Claims 1,000,000
• Profit 1,100,000
• Total Pooling Balance is paid back to the client

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The Global Network
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The Global Network
Argentina Denmark India Netherlands South
Africa Australia Dominic Republic Indonesia New
Zealand Spain Austria Ecuador Ireland Nicaragua S
weden Belgium Egypt Israel Norway Switzerland Be
lize El Salvador Italy Panama Taiwan Bermuda Esto
nia Japan Peru Thailand Brazil Finland Korea Phil
ippines Thunisia Bulgaria France Latvia Poland Tu
rkey Canada Germany Lithuania Portugal Ukraine C
hile Gibraltar Liechtenstein Puerto
Rico U.K. China Greece Luxembourg Romania U.S.A
Colombia Guatemala Malaysia Russia Venezuela Croa
tia Honduras Malta Singapore Offshore Cypris Hong
Kong Mexico Slovak Republic Czech
Republic Hungary Morocco Slovenia
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Multinational Pooling

• Multinational Pooling allows multinational
  employer to achieve
• Better coordination of employee benefit plans
• Better control of local costs
• Simplified administration procedure
• Better buying power
• Economy of scale through possible end-of-year
  multinational dividend

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Income Protection Plan

• Insuring employees income
• Can insure up to 75 of salary
• Deferred period 4, 13, 26 or 52 weeks
• Benefit paid until retirement age or well enough
  to get back to work
• Benefit will be subject to Income Tax

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Pension Benefit

• To be or not to be

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E-Benefit

• Effective Communication is the key

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E-Benefit (cont)
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E-Benefits (cont)
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Flexible Benefits

• Benefits can be tailored to the needs of each
  individual employee
• Employer gives employee a percentage of his/her
  salary to spend on benefits
• Employee makes choices on how to spend
• Benefits can be matched to life style
• Benefits change when life style changes

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Needs Change as Lifestyle Changes
Retirement
Enter workforce
Career Progression
Pre-retirement
Marry/ partner
Elder Care
House Purchase
Childrens education
Parenthood
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E- Flexible Benefits
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Future of Compensation Benefits in Russia

• Benefits provided but quality can be improved
• Health insurance
• Disability insurance
• Life insurance
• Benefits rarely provided
• Work/life balance
• Home working
• Child care
• Flexi time

• CB not provided in Russia
• Long-term disability
• Pension development both state and private

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Thank You
Contact details

• Gerard Baltazar
• E-mail gerard_at_in2consulting.co.uk
• Website www.in2consulting.co.uk

Paddy Wright E-mail paddywright_at_kpmg.ruWebsite
www.kpmg.ru