Integration, Alignment, and Synergy Benefits: Plan It Out

Keyword(s):  
2005 ◽  
Vol 8 (1) ◽  
Author(s):  
Dana P Goldman ◽  
Neeraj Sood ◽  
Arleen Leibowitz

Many companies have defined-contribution benefit plans requiring employees to pay the full cost (before taxes) of more generous health insurance choices. Research has shown that employee decisions are quite responsive to these arrangements. What is less clear is how the total compensation package changes when health insurance premiums rise. This paper examines employee compensation decisions during a three-year period when health insurance premiums were rising rapidly. The data come from a single large firm with a flexible benefits plan wherein employees explicitly choose how to allocate compensation between cash wages and other benefits. Under such an arrangement, higher health insurance premiums must induce changes in the composition of total compensation–either in lower after-tax wages or in decreased contributions to other benefits. The results suggest that about two-thirds of the premium increase is financed out of cash wages and the remaining one-thirds is financed by a reduction in benefits.


Author(s):  
Mario E. Buszynski ◽  
Tanya Peacock

Novia Scotia, a province of about one million people, is located on the east coast of Canada. With the discovery of large natural gas reserves off the Scotian Shelf, offshore production platforms, undersea and onshore pipelines have been constructed to link the find with major markets in Boston by the end of 1999. The onshore pipeline through the province will allow a distribution system to be developed. This natural gas system will be the largest Greenfield development seen in North America for many years. A billion-dollar expenditure is proposed to establish a local distribution company, which would construct and maintain around 8,000 kilometres of distribution and lateral pipelines in the province. An integral part of this program involves the provision of local benefits through hiring and purchasing of goods and services. This paper describes aspects of the construction program and benefits plan proposed during the regulatory hearings in order to illustrate the methods used to ensure that the objectives of accessing the majority of Nova Scotians in a seven year planning horizon will be met. The varied landscapes to be crossed and specialized construction techniques to meet those challenges are discussed. The mechanisms in place to ensure maximum benefit for Nova Scotians are also discussed. Up-to-date information will be presented to demonstrate how the benefits plan is being implemented. The successes of the benefits plan for the distribution utility and the other local megaproject in the province (Sable Offshore Energy) are compared. Conclusions will be drawn regarding successful strategies for implementing benefits plans related to large energy projects.


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