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H E A LT H W E A LT H C A R E E R

B E N E F I T S B E N C H M A R K I N G R E P O R TC O M PA N Y N A M EM O N T H 1 , 2 0 1 5

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PEER-REVIEW BY:

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Country Benefits Benchmarking Executive Summary

0. Contents

1. Executive Summary ..................................................................................................................................................................................................... 2

2. Benchmarking Analysis................................................................................................................................................................................................ 4

2.1. Retirement Benefits........................................................................................................................................................................................ 5 2.2. Flexible Benefits........................................................................................................................................................................................... 14 2.3. Life Insurance............................................................................................................................................................................................... 15 2.4. Short-term Disability..................................................................................................................................................................................... 17 2.5. Long-term Disability ..................................................................................................................................................................................... 19 2.6. Medical and Dental Benefits ........................................................................................................................................................................ 21 2.7. Holiday Entitlement ...................................................................................................................................................................................... 23 2.8. Company Cars ............................................................................................................................................................................................. 25 2.9. Other Benefits .............................................................................................................................................................................................. 30

3. Peer Group ................................................................................................................................................................................................................ 32

© 2013 Mercer LLC March

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1. Executive Summary Mercer has been retained by Company ABC to carry out a high level benchmarking to industry sector exercise for its current benefit plans in Country. The peer group consists of 10 companies listed in the last section. These results should be considered in line with the results of a wider total compensation review before any action is taken. Overall, Company ABC has a competitive benefits package in Country. The benefits provided are at or slightly ahead of market practice for industry sector, with the exception of compensation for medical disability, which offers a lower lump sum than is common at the market. The following sources were used to show the market figures:

- Mercer’s Worldwide Benefits and Employment Guidelines 2012 Edition - Total Remuneration Survey Country 2012 - Mercer Benefits Monitor Country 2012 - Local expertise form Mercer Consultants in Country.

Values are stated as median, unless otherwise indicated. Mercer is not a law firm and as such the information provided in this report should not be construed as legal advice.


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1.1. Positioning

Benefit Details Positioning Comments

Retirement Benefits = In line with the market practice (less than half of the market offers DB plan)

Flexible Benefits = In line with the market practice.

Life Insurance Regarding lump sum plan design in line with the market. Slightly below the market practice in terms of providing pension to a spouse as half of the market provides pension.

Short-term Disability Below the market practice due to longer waiting period and availability of the plan after 5 years of service only.

Long-term Disability = In line with the market practice.

Medical and Dental Benefits

In plan design in line with the market practice. Considering payments, below the market practice while length of service less than 3 years and above the market practice while length of service more than 4 years.

Holiday Entitlement = In line with the market practice.

Company Cars Slightly above the market practice due to longer holiday entitlement for executives.

Other Benefits = In line with the market practice.

= Plan aligned with market (= indicates marginally above and = indicates marginally below) Plan above market ( significantly above) Plan below market ( significantly below)


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Country Benefits Benchmarking Retirement Benefits

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2. Benchmarking Analysis


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1.1. Retirement Benefits

Benefit Details Company Market Practice – Industry Sector Comments

Overview ABC provides Defined Contribution plan 45% of companies provide a Defined Benefit plan. 62% of companies provide a Defined Contribution plan.

In line with market practice with respect to Defined Contribution plan.

Type of Plan Defined Benefit Plan Not applicable.

56% of schemes are closed to new entrants, but 40% of those are open for future service.

Defined Contribution Plan Group Stakeholder Pension.

The DC schemes are of the following types: Group personal pension (45%) Occupational defined contribution plan (36% of respondents) Group stakeholder pension (27%)

ABC offers third plan in order of prevalence on the market.

The scheme is open for new entrants and for future service.

In all types of schemes, 100% of schemes are open to new entrants and 100% are open for future service.

In line with the market practice.

Plan Eligibility Defined Benefit Plan Not applicable.

100% of companies responded that all employees are eligible to join the plan. 67% of companies do not stipulate any eligibility conditions.

Defined Contribution Plan All employees.

100% of companies responded that all employees are eligible to join the plan. 75% of companies do not stipulate any eligibility conditions.



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Plan Eligibility (cont.)

Group Personal Pension Not applicable.

All responding companies indicated that all employees are eligible to join the plan. 44% of companies do not stipulate any eligibility conditions. If conditions are stipulated by length of service, the average value is 5 months, if stipulated by minimum age, the average value is 17, if stipulated by maximum age, the average value is 68.

Stakeholder pension: All employees. The scheme is open for new entrants and for future service.

All responding companies indicated that all employees are eligible to join the plan. The plan is open for new entrants and for future service in all responding companies.


Normal Retirement Age

Defined Benefit Plan Not applicable.

65 years old (80% of companies) 60 years old (20%)

Defined Contribution Plan No data available.

65 years old (67% of companies) 60 years old (33%)

GPP and Stakeholder pension Not applicable.

All companies indicated that in GPP and stakeholder pension schemes normal retirement age is 65.


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Pensionable Earnings


Pensionable earnings usually include annual salary plus: Shift allowance (33% of respondents) Bonus (22%) Overtime (22%) Almost none of the responding companies apply deductions from pensionable salary to calculate contributions. 50% of responding companies do not apply averaging period (pensionable pay at retirement), another 25% apply defined number of best years as averaging period for pensionable pay. None of the responding companies apply a different definition for pensionable salary on which contributions are based.


Pensionable earnings usually include annual salary plus: Bonus (25% of respondents) Overtime (20%). None of the responding companies apply deductions from pensionable salary to calculate contributions. None of the responding companies has an upper limit for pensionable salaries which is different to the statutory amount.


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Pensionable Earnings (cont.)


Pensionable earnings usually include annual salary plus: Overtime (33% of respondents) Bonus (22%) Commission (22%) Shift allowance (22%) Other fixed allowance (22%) Almost none of the companies applies deductions from pensionable salary to calculate contributions. None of the responding companies has an upper limit for pensionable salaries which is different to the statutory amount

Stakeholder pension: ABC’s pensionable earnings include basic annual salary only.

Pensionable earnings usually include annual salary plus: Bonus (25% of respondents) Commission (25%)



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Normal Retirement Benefit


43% of companies indicated that pension or lump sum are available to employees upon retirement, 29% of respondents allows pension only and 29% of respondents allows pension and lump sum. 80% of organizations indicated that the pension at retirement is calculated using a 1/60th accrual rate, the rest of companies provide pension calculation using other accrual rate. The plan is contracted out of the S2P/SERPS in 67% of companies.

Defined Contribution Plan The plan is contracted in the S2P/SERPS. In addition to the contributions, the following items are paid: investment management charges, consultants charge, administration charges. Employees are not allowed to contribute on a salary sacrifice basis.

The plan is contracted in the S2P/SERPS in 75% of companies. In addition to the contributions, the following items are paid: contracting out National Insurance rebates (67% of companies), risk benefit premiums (67%). None of the companies pass back any employer national insurance savings back to employees.


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Normal Retirement Benefit (cont.)


The plan is contracted in the S2P/SERPS in 57% of companies. In 67% of companies, employees are not allowed to contribute on a salary sacrifice basis whilst a member of the GPP. In none of responding companies any notional cap is applied. Half of the companies do not pass back any employer national insurance savings back to employees. Among companies passing back savings, most (67%) pass back 12.8%.

Early retirement Defined Benefit Plan Not applicable.

Median minimum age at which employees can retire with no reduction in benefit is 60 years, and with reduction in benefit is 53 years.


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Death after retirement


On the death of the member after retirement, in 50% of companies the surviving spouse receive pension, and in other 50% of companies – lump sum and pension. In 75% of companies, there is a guarantee period up to which the pension benefit is payable for, which is 5 years in 67% of responding companies. Median proportion of member's pension paid to the spouse is 50%. In all of the responding companies the surviving children receive pension on the death of the member after retirement, in 20% of companies – also lump sum is provided.

High Earners’ Pensions

ABC does not make provision for earnings in excess of the earnings cap.

None of the companies makes provision for earnings in excess of the earnings cap.


Pension Increases


67% of companies offer increases to pensions after retirement. 33% of the responding companies use RPI as the guaranteed increase rate, 33% - RPI up to 5% and 33% other guaranteed increase rate.

Employee Contributions


No data available.


In 25% of companies the contributions are fixed, in the rest of companies they are variable


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Employee Contributions (cont.)


In 56% of companies the contributions are fixed. If the contribution rate is fixed, median employee contribution to GPP is 3% for main policy and 4% for executive and management policies.

Stakeholder pension: In ABC employee contributions are 3% of pensionable earnings.

Average employee contribution rate is 4%. Employee contributions are lower than the market practice.

Employer Contributions


Average employer contributions are 12% of salary.


In 25% of companies the contributions are fixed, in the rest they are variable. If contribution is variable, in 33% of companies it varies by length of service, in 33% of companies it varies by age of employee, in 67% of companies it varies by employee’s contribution.


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Employer Contributions (cont.)


In 56% of companies the contributions are fixed. If the contribution rate is fixed, median employer contribution to GPP is 6% for main policy and 7% for executive and management policies. If contribution is variable, in 50% of companies it varies by length of service, in 25% of companies it varies by age of employee, in 75% of companies it varies by employee’s contribution.

Stakeholder pension: In ABC’s plan employer contributions are 7% of pensionable earnings.

Average employer contribution rate is 7%. Employer contributions are in line with the market practice.


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Country Benefits Benchmarking Flexible Benefits

1.2. Flexible Benefits


Description ABC does not provide flexible benefits plan. Within industry, 30% of participants provide flexible benefits. Core benefits included in flexible benefits plan are: life assurance (100% of companies), holidays (100%), long term disability cover/income protection (80%), private medical insurance (80%), pension (80%) and other (20%).

In line with market practice.


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Country Benefits Benchmarking Life Assurance

1.3. Life Insurance


Overview ABC offers life assurance cover. 82% of respondents offer life assurance benefits.


Eligibility All employees. ABC provides lump sum for a spouse. ABC does not provide pension to the surviving spouse.

100% of respondents who provide life assurance offer death benefits to all employee groups. 93% of the companies providing life assurance offer a lump sum for a spouse. 57% of companies provide a pension to the surviving spouse.

In line with the market practice for lump sum and slightly below for pension benefit.

Benefit Description

For the purpose of this benefit ABC defines salary as annual base salary.

In the salary definition for death benefit payments the following components are included: basic annual salary (100% of organizations), commission (7%) and other fixed allowance (7%).


Lump sum The benefit provided is a lump sum of 48 times monthly salary.

Lump sum benefits are provided by all companies on a salary-related basis. The most prevalent benefit provided (50% of respondents) is 48 times monthly salary for pension scheme members. 23% of respondents apply a cap to life assurance benefits.


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Country Benefits Benchmarking Life Assurance


Benefit Description (cont.)

Pension Not applicable.

The most common practices are to base the pension on the member’s annual base salary (40% of respondents), and the member’s retirement pension projected to normal retirement age (40% of respondents). Other options include member’s pensionable salary. Upon death in retirement, spouse's benefits are paid as a continuation of the member's pension, with a median benefit of 45% of the member's pension.


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Country Benefits Benchmarking Short-term Disability

1.4. Short-term Disability


Overview ABC provides a sickness entitlement in excess of the statutory minimum. The benefit is based on basic annual salary.

79% of respondents provide sickness entitlements in excess of the statutory minimum. All respondents base the benefit on annual base salary, 21% also include bonus, 21% - shift allowance and 14% - other fixed allowance.


Coverage Type Short-term inability to work. Short-term inability to work.

Eligibility All employees. All employees. In line with the market practice.

Benefit Description

Sick pay is variable by length of service. For 57% of employees benefit varies with the length of service while 36% of respondents have the same sick pay policy for all employees.



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Country Benefits Benchmarking Short-term Disability



The entitlement for full pay is as below: Length of Service Bands

Full Pay Base Salary

0 - 6 months 0 weeks 6 months - 1 year 2 weeks 1 - 2 years 4 weeks 2 - 3 years 8 weeks 3 - 4 years 12 weeks 4 - 5 years 18 weeks 5 - 7 years 26 weeks 7 – 9 years 26 weeks 9 - 10 years 26 weeks 10+ years 26 weeks

When the company applies the same policy for all employees, average entitlement for full pay is 13 weeks and for half salary pay is 17 weeks. Where companies apply the policy that differs by length service, the entitlement for full pay is as below: Length of Service Bands

Full Pay Base Salary

0 - 6 months 5 weeks 6 months - 1 year 5 weeks 1 - 2 years 7 weeks 2 - 3 years 11 weeks 3 - 4 years 12 weeks 4 - 5 years 18 weeks 5 - 7 years 23 weeks 7 – 9 years 23 weeks 9 - 10 years 23 weeks 10+ years 23 weeks

Below the market practice while length of service less than 3 years and above the market practice while length of service more than 4 years.


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Country Benefits Benchmarking Long-term Disability 1.5. Long-term Disability


Overview ABC offers long-term disability cover. 63% of respondents offer long-term disability cover.


Eligibility All employees are eligible after 5 years of service.

In 100% of companies executives and management are eligible. In 92% of companies main policy includes long-term disability benefits.

Below the market practice because benefit is available after 5 years of service only.

Type of Benefit ABC provides disability benefit in the form of income protection scheme.

All responding companies provide the benefit in the form of income protection scheme. 8% of companies provide benefit through the pension plan and 8% provide it in the other way.


Waiting Period (Period of Disablement Before Benefits Begin)

28 weeks All respondents indicated 26 weeks as a waiting period.

Below the market practice.

Benefit Description

As an income protection The benefit is based on basic annual salary.

In all responding companies, benefit is based on basic annual salary. In 18% of companies it is based additionally on other fixed allowance and in 9% of companies - on bonus.


65% of salary less state benefits and single person’s long-term incapacity benefit. Benefit is payable until age of 65.

Average benefits are 68% of pre-disability pay less state benefits and single person’s long-term incapacity benefit, payable to age of 65 (88% of companies).



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Country Benefits Benchmarking Long-term Disability



Benefit increases are not guaranteed. 56% of the responding companies do not guarantee increases. Among the companies who guarantee increases, the average increase is 4%.



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Country Benefits Benchmarking Medical and Dental Benefitst

1.6. Medical and Dental Benefits


Overview ABC provides private medical cover. The plan is fully insured.

89% of respondents provide private medical benefits, and 92% of these companies do so via insured plans.


Eligibility All employees. 100% of respondents who provide medical benefits offer benefits to management and executives and 81% of respondents – as a main policy.


Coverage Type Employee, spouse and dependants. In the main policy 55% of responding companies provide cover for employee, spouse and children and 45% provide it for employee only. At managerial level 69% offer family coverage and 31% -employee only. At executive level 81% offer family coverage and 19% - employee only.


ABC does not require employees to pay an excess.

56% of companies do not require employees to pay an excess. If the excess payment is required, the amount is on average 100 £ per claim.


Benefit Description

No data available. Supplemental medical plans typically cover private hospital accommodation and NHS pay beds; theatre, surgeons’ and anaesthetists’ fees; specialist consultation fees; outpatient visits; inpatient drugs and dressings. Dental and vision plans typically provide reimbursement up to fixed limits


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Country Benefits Benchmarking Medical and Dental Benefitst


Employer Contributions

ABC pays 100% of costs for employee, spouse and dependants cover for all eligible employees.

Employer pays 100% of benefit costs. In line with market practice.

Employee Contributions

No employee contributions required. All respondents stated that employees do not pay for the cover.


Dental Care Dental cover is not provided. 64% of responding companies do not provide dental care, 18% of companies not provide dental care under private medical scheme and 18% of companies provide dental care as a separate benefit.



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Country Benefits Benchmarking Holiday Entitlement

1.7. Holiday Entitlement


Annual Vacation ABC provides holiday entitlement over and above statutory requirements. Basic holiday entitlement is 25 days for a main policy and 30 days for executives.

94% of responding companies provide employees with holiday entitlement over and above statutory requirements. The most prevalent (60% of companies) basic holiday entitlement excluding public holidays is 25 days, and 13% of companies offer 26 days of holiday.

ABC is in line with market practice with respect to holiday entitlement for main policy and is above market practice with respect to holiday entitlement for executives.

ABC provide additional days holiday based on service. One additional day is allowed after 5 years of service and 5 additional days after 10 years of service.

53% of responding companies do not provide additional days holiday based on service. When the benefit varies with the length of service, the maximum number of days holiday allowed over an above basic holiday entitlement is 2 days after 2 years of service (average), 3 days after 5 years of service, 4 days after 10 years of service, 4 days after 15 years of service, 5 days after 20 years of service and 5 days after 25 years of service (median values).

In line with the market practice. Market is divided into halves with regard to providing additional days holiday based on service.

ABC allow unused days to be carried over with maximum number of days equal to 5.

All of respondents allow unused days to be carried over with maximum number of days equal to 5.


Employees are not allowed to buy or sell holidays.

53% of companies do not allow employees to buy or sell holidays. When they do, they allow an employee to buy or sell 5 days


Public Holidays No data available. Most companies provide paid time off for public holidays.


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Country Benefits Benchmarking Company Cars

1.8. Company Cars


Eligibility Company car is provided to selected groups of employees according to the following categories: Category A: Employees having position with IPE >= 59 or Dirigenti Category B: Employees having position with IPE = 58, staff functions excluded, or with role of IT Manager, IT Business Partner in the SSIT or Area Manager in FSO Category C: Employees evaluated as Key people according to criteria and instructions defined during the annual salary review implementation process.

94% of companies provide company car benefits to employees. Eligibility is as follows: Executives: 100% of companies Management: 100% Professional Sales: 100% Professional Non-Sales: 83%.


Financing method Contract hire with maintenance Types of financing methods include: Long term rental (69% of companies) Leasing (23%) Purchase (0%) Combination of the above (8%)



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Company paid fuel

Fuel expenses are paid by the company with the following levels: Category A: €250 per month Category B: €150 per month for car Category C: None.

Most prevalent practice is coverage of all fuel for private use: Executives: 100% of companies cover 100% of fuel for private use Management: 67% Professional Sales: 40% Professional Non-Sales: 44%. 25% of companies use single oil organization fuel card system and 75% - multiple oil organizations fuel card system.


Private use Private use of the car is allowed. All of responding companies allow private use of the car. In 33% of organizations Executives are required to contribute for the private use of the company car and in 43% - Management, Professional Sales and Professional Non-Sales are required to contribute.


Number of employees with company cars

423 No data available.

Company paid car parking

Car parking is free at the office premises. No data available.

Car requirements

According to the following categories: Car Category B BRAVO 1.6 Multijet 16v 105cv Dpf

Active PEUGEOT 308 SW Sw Business 1.68v

E-Hdi 112cvS/s

According to position: Executives: Audi A6 Mercedes Volkswagen



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Car requirements(cont.)

ALTEA XL XL 1.6 TDI CR Style Ecomotive DPF

DELTA Silver MultijetDpf 120 Cv GOLF 1.6 TDI DPF 5p. BlueMotion GIULIETTA 1.6 JTDm-2 105CV

Distinctive C4 1.6 e-HDi 110 FAP air. CMP6

Business SEDICI 2.0 Multijet 16v 135cv DPF

Emotion 4X4 Car Category A Alfa Romeo GIULIETTA 2.0 JTDm-2

140CV Distinctive Peugeot 3008 1.6 8V HDi 112CV FAP

Business Citroen C4 GRAND PICASS 1.6 E-Hdi

110 Fap Cmp-6 Seduction PEUGEOT 5008 1.6 E-Hdi Allure S&s

Cambio Robot. Fap Lancia DELTA MJT DPF Selectronic

Platino Seat EXEO ST 2.0 TDI STYLE SW DPF Lancia DELTA Platino 2.0 Multijet 165

CV PEUGEOT 508 2.0 16v Hdi 163cv

Business Fap PEUGEOT 508 SW 2.0 16v Hdi 140cv

Business Ciel Fap Citroen DS4 1.6 E-Hdi 110 Fap Cmp-6

So Chic Mini COUNTRYMAN Cooper D All4 Alfa Romeo GIULIETTA 2.0 JTDm-2

170CV Distinctive

Volvo. Management: Audi A6 Mercedes Volkswagen Volvo. Professional Sales: Audi A6 Mercedes Volkswagen Volvo. Professional Non-Sales: Audi A6 Mercedes Volkswagen Volvo.


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Car requirements(cont.)

VW TIGUAN 2.0 tdi 103kw TREND&FUN BLUEMOTION TECH.

Seat Alhambra 2.0 TDI CR DPF Style Citroen DS4 2.0 Hdi 160 FapSport Chic Audi A4 2.0 Tdie 88kw Audi A4 2.0 Tdie 88kw AVANT Audi Q3 2.0 Tdi 103kw BMW X1 Xdrive 18d 4x4 VW TIGUAN 2.0 tdi 103kw

TREND&FUN BLUEMOTION TECH.

Monthly maximum lease value

Maximum monthly leasing cost per employee is as follows: Category A: €600 Category B: €500 Category C: €400

Maximum monthly leasing cost per employee is as follows: Head of Organization: €989 Executives: €1,000 Management: €729 Professional Sales: €500 Professional Non-Sales: €420.


Maximum length 4 years Companies basically replace cars after 4 years for all employee levels. In terms of distance, car is replaced after 120,000 km.



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Additional benefits

The following costs are paid by the company: Regular maintenance Insurance “Kasko” insurance (comprehensive insurance: extended coverage for damages to the vehicle caused by the assignee).

Organizations offer the following additional coverage: Motorway fees for private use of the car (in 33% of companies Head of Organization and Executivesare eligible while other employee groups are not eligible) Possibility to purchase the car at the end of replacement period (25% of organizations) Possibility to purchase the car at the end of replacement period (25% of organizations) Car accessories (in 83% of companies Head of Organization and Executives are eligible): radio and CD player (71% of companies), antitheft device (57%), satellite navigator (43%), telephone set (43%) and other.


Leasing vendor LeasePlan and Arval No data available.

Leasing administration fees per year

Already included in the above monthly fees. No data available.


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Country Benefits Benchmarking Other Benefits 1.9. Other Benefits


Share Purchase Plan

ABC does not provide a share purchase plan. 33% of responding companies provide a share purchase plan. Among these companies, 100% of employees are eligible for the plan.


One year plans Not applicable.

Median maximum percentage of basic salary which can be used to purchase shares is 10%. In 67% of responding companies, the amount which can be used to purchase shares is limited. The median annual maximum amount is €10,313. In none of companies interest rate is added to the savings. Median discount to market value for share purchase is 15%. In 83% of responding companies, the plan is approved by the Inland Revenue.

Loans ABC does not provide loans to employees. 75% of responding companies do not offer loans to their employees. All of those that offer loans offer them for a season ticket.



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Country Benefits Benchmarking Other Benefits


Club Subscriptions

ABC pays pay for employees' subscriptions to a professional society. The organization pays partly for employees' subscriptions to a social/sports club.

71% of companies pay for employees' subscriptions to a professional society. 29% of companies pay wholly for employees' subscriptions to a social/sports club.


Meals Canteen meals are 100% subsidized by ABC. No data available.

Discounts for Organization Products

ABC does not offer discounts for organization products for employees.

24% of companies allow employees to purchase organization products at a discounted price.



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Country Benefits Benchmarking Peer Group

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3. Peer Group Company Name Industry

Company 1 Company 2 Company 3 Company 4 Company 5 Company 6 Company 7 Company 8 Company 9 Company 10


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