Tag: executivehealth

The employee benefits industry has transitioned benefits plans to a must-have, rather than an option. Candidates look for employee benefits offerings and hope to find a package that works for their everyday lifestyle. Often, plans are tailored to a general population, better suited for the working class. We tend to forget that executives tend to be part of these plans as well and are also often underinsured. Therefore, what has come to fruition is the idea behind executive packages.

As a little history lesson, in the past, your top leadership team sat on the same benefits as everyone else in the company. Employers are now asking themselves whether that is still enough. Fortunately, we are seeing a shift in the industry that the days of the one-size-fits-all executive packages are over.

For plan sponsors, here’s what’s changing:

1. The talent war has gone global.
   
   1. Boards of directors are no longer looking for leadership talent locally but rather are now looking globally. They are competing against U.S. firms, global companies and remote competitors. A rigid compensation and benefits formula does not cut the market anymore. Boards of directors are shifting towards structural flexibility. Strong governance on paper. But real customization underneath it.
      
      1. As an example, your VP of Operations gets a call from a U.S. competitor offering not just more salary, but a tailored health and retirement package built around their specific stage in life. If your plan can’t compete on that level, and salary alone, your employee is gone.
2. Standard plans have hit their ceiling.
   
   1. Group benefits plans are built for the average employee, not an executive. Life insurance caps out too early, disability coverage does not replace enough income, and the employee is underinsured. Retirement contributions are maxed out.
      
      1. The fix – a bigger version of the same plan.

Where are things headed?

1. Retirement gets more tax-efficient. Tools like Individual Pension Plans (IPPs) and Retirement Compensation Arrangements (RCAs) let executives save well beyond standard RRSP limits. Tax-efficiently.
2. Healthcare is faster and more personal. Expedited specialist access and mental health support are becoming more common and no longer an additional add-on.
3. Compensation has become more flexible. Instead of a basic formula, companies are giving more executive choices, such as compensation being split between salary, retirement, and benefits. All for the purpose of tax efficiency.

What does this mean for you?

It doesn’t mean that your current plan is no longer adequate. With the focus on executive benefits, it just means that we now must ask a different question. Does our leadership package actually protect our key employees, but also reward these individuals enough? OR is it just a slightly bigger version of the current group plan?

If you’re not sure, that’s the perfect place to start the conversation.