Group Benefits

Cost Biggest Factor in Plan Design

Three-quarters (74%) of employers cite cost as the most important aspect when designing and reviewing their benefit plans followed by employee attraction and retention (63%) according to a survey by MBWL International Limited and Normandin Beaudry. The global survey polled almost 120 employers representing six million employees and found 74% said healthcare/medical benefits are the most important to employees.

When asked about diversity, equity and inclusion which factors are prioritized when designing and managing benefits, 67% of respondents cited equity across job levels while 66% cited age/generational considerations.

The recommendation from the survey is improving benefits is worth the investment suggesting by supporting your employees, there is a better chance of retaining them, keeping them in good health and productive.

Education a Key to Successful Outcomes

In a survey by RBC Insurance of 1,000 working adults, nearly all said they need to improve their health and well-being but cited barriers including lack of motivation (35%), busy schedules (33%), mental health (25%) and long working hours (19%). However, the survey indicated only 5% of workers with employer-provided benefits turn to them as the “go-to” for support. A lack of understanding for their coverage was an issue with 24% admitting they don’t know much about their benefits and 17% were uncertain where to find resources that could improve their well-being.

However, a survey by Blue Cross of Canada polled more than 2,300 working adults and concluded Canadians with employer-provided benefits are 20% more likely to seek care when needed and 25% report better health than those without benefits. While the percentages are, in our view, low, this points to an opportunity for both employers and insurers to better educate and engage employees to ensure they understand the value-added services they have access to that can assist with various aspects of their well-being.

Pharmacogenetics and Pharmacogenomics - The Differences

Both of these are relatively new additions to the world of Drug plan management and they do differ slightly in scope.

Pharmacogenetics focuses on how one drug is metabolized across different people by examining the relationship between individual genetic variations and drug responses. Pharmacogenomics takes a broader approach by looking at an individual’s entire set of genetic information to predict how they will respond to various medications. This is an evolving science and, while pharmacogenetics was the precursor, pharmacogenomics has expanded into a more comprehensive field that includes pharmacogenetics as a subset.

This evolution allows for more precise medical decisions, making it possible to predict how different drugs will interact with an individual’s genetic profile.

These services are now available from some insurers and through specialty providers.

Group Savings

Half of Canadians Behind in Retirement Savings

A new survey by Manulife suggests half (51%) of Canadian employees say they’re behind in their retirement savings and 34% are worried about not having adequate money saved when they retire.

The survey polled more than 1,500 employees and over 500 retirees and findings include:

• Generation X had 35% who were on track
• Generation Z and Millennials had 36% and Baby Boomers were at 42%
• Baby Boomers (61%) say saving for retirement is a priority followed by Gen Z and Millennials at 51% and Gen X at 50%

The survey also identified one cause for concern among those polled as being life expectancy, which surpasses age 80, and how they will fund retirement for two or more decades.

What Employers Need to know about the 2024 CAP Guidelines

The Canadian Association of Pension Supervisory Authorities (CAPSA) released its 2024 guideline for capital accumulation plans (CAP) in September. Updated regulatory guidelines are rarely shorter than their predecessors and the 2024 CAP guideline is no exception to that rule with 10 pages of content and significantly more "shoulds” with respect to sponsor and service provider duties.

Some of the important guideline changes focus on:

• Expanding the definition of a CAP to include additional plan types
• Providing more information and education for members with a focus on how to make the most of their CAP
• Delivering more transparency for members around the costs associated with their accounts
• Conducting periodic reviews of service providers, investment options, fund performance and risks, member behaviour and education, and decision-making tools.

Ensuring fulsome observance of the new guideline will be particularly challenging for small and medium-sized employers which often do not have the resources or internal expertise to perform or even supervise the many tasks for which a CAP sponsor is responsible. The team comprised of the advisor and plan administration company for the fund are natural resources for the employer on this exercise.

Legislative

Minimum Wage Increases

Effective October 1, 2024, the following provinces will see an increase to their basic minimum wage:

• Manitoba’s minimum wage will increase to $15.80/hour from $15.30/hour
• Ontario’s will increase to $17.20/hour from $16.55/hour
• Prince Edward Island’s will increase to $16.00/hour from $15.40/hour
• Saskatchewan’s will increase to $15.00/hour from $14.00/hour

There was also an adjustment in the Northwest Territories on September 1, 2024 which saw the minimum wage increase to $16.70 per hour.

Further minimum wage increases will occur periodically through 2025 with at least four jurisdictions set to increase their basic minimum wage on April 1, 2025

Canadian Employers Increasing 2025 Salary Budgets

There are a number of surveys at this time of year that poll employers across Canada and in different industry sectors to ascertain their plans for salary adjustments in the coming year. One such survey by Normandin Beaudry polled over 700 employers and found employers planned on increasing salaries by an average of 3.4% which is down slightly from 3.6% in 2024.

Average adjustments are different by industry sector though as evidenced by the following examples:

• High-tech are planning the highest average increase at 4.3%
• Telecommunications and data processing/warehousing are next at 3.9%
• Professional, scientific and technical services at 3.7%
• Construction at 3.6%
• IT consulting services at 3.5%

According to a similar survey by Eckler Ltd., the sectors with the lowest projected increases are health-care at 2.8% and education at 2.9%.

Changes to Employment Insurance

The federal government recently announced changes to the Employment Insurance (EI) rates and benefit maximums to be effective January 1, 2025.

The employer contribution continues to be 1.4 times the employee premium. The key elements are:

• Maximum insurable earnings are $65,700
• Maximum annual contribution for the employee will be $1,077.48 and for the employer $1,508.47 but, in Quebec, the employee maximum will be $860.67 and the employer maximum $1,204.94
• Maximum weekly benefit will be $695

The benefit will affect a Short-Term Disability (STD) plan if the benefit is equal to the EI maximum or is based on the EI maximum insurable earnings.

If your STD plan provides a benefit equal to or better than the new EI weekly maximum benefit, then it will qualify for the EI premium reduction program.