Conducting a Benefits Review A Best Practice Insight

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Conducting a Benefits Review - A Best Practice
Insight

• Maurice Cheng, Chief Executive, IPP
• Alison Ward, Non-Executive Director, IPP
• Employee Benefits Conference 2007

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Agenda

• Why do you need an audit?
• What are the areas to consider
• Financial
• Statistics
• Tax compliance
• Air and share time for questions and answers

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Who are we?

• Maurice Cheng
• Alison Ward
• IPP

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A new flexible programme can be like a fine
romance
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In the beginning

• Lots of attention
• Keep looking at what is happening
• Boasting over the process
• Everything seems wonderful

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In some cases

• The relationship lasts
• Everything remains high quality
• Everyone remains happy

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But if you are not careful

• You are surprised by a breakdown when a crisis
  occurs
• You only find out its not working when one party
  leaves the relationship
• People start making bad comments behind your back

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All that hard work must be maintained

• Effort is needed
• - In the beginning
• - As you go along
• - Even at the end

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Its natural to question

• Individuals will question what is happening
  whether you ask them to or not
• They will have a perception of how things are
  going based on
• - Hunch- Personal concern - Looking for
  savings- Proving a point

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Decisions and reaction

• Need to make assessment using
• - Experience- Resources- Actual facts not
  supposition- Trend and forecast

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Dont be random

• Think about the areas that you want to review
• Be consistent in your assessment
• Co-ordinate each aspect
• Share the findings between areas
• Compare and react to outcome
• Monitor effectiveness of action

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Parties involved

• Scheme sponsor usually HR
• Financial Controller
• Recruitment / line manager
• Administrator (tax / payroll / admin support)

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Data to be monitored

• Cost to company
• Employment use
• Error / complaint success / thanks
• Company changes
• External changes

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Data to be monitored

• Cost to company the most common area for audit
• - Payment to provide benefit
• - Tax cost
• - Administration cost

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Data to be monitored

• Employment use
• - Take up
• - Employee demographics
• - classification (age, sex, service, grade /
  type)

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Data to be monitored

• Error / complaint
• Success / thanks
• - Measuring these to help identify if there is
  benefit in running the scheme
• - That the provider / partner is adhering to
  contract commitment
• - To identify trends where change may be
  appropriate

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Data to be monitored

• Company change
• - Acquisition / disposal affecting employee
  demographics
• - Employee groups maturity, type, aspiration
• - Profitability
• - Mission focus
• - Critical players

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Data to be monitored

• External change
• - supplier of benefit
• - taxation change
• - improved benefit offerings

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Consistency

• Try to use clear and common terms
• Compare like-for-like
• - Look at groupings, time spans, adequate
  comparison periods
• - Consider if extraordinary circumstances
  warping figures
• - Pictorial representation usually give quicker
  impression of findings

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Internal / external review

• Assess if feel competent company skills up to
  review
• Ensure use expert knowledge
• - eg IPP expert information on Tax issues
• Take time to check attending this type of event

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REMEMBER !

• Old sayings are not always true.
• No news
• does not mean
• good news
• It just means you will remain ignorant of what is
  going on

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• THANK YOU FOR LISTENING
• ANY QUESTIONS ?

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Remember IPP offers professional support

• Tel [phone]
• E-mail info_at_payrollprofession.org
• Website www.payrollprofession.org