www.mercer.com

Mercer Benefits Solutions

20th April 2010

Godelieve Kroonenberg, Liana AttardSingapore

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Agenda – Mercer’s Benefits Solutions

Setting the context– Where do employee benefits fit in?– Mercer’s broad range of benefits offerings– Prospects

Focus on the IPS Benefits Survey– Mercer BenefitsMonitor

From information to consulting - examples of benefits projects– Benefits Prevalence Benchmark– Benefits Valuation– Benefits Consulting

Marketing resources

Setting the context

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Where do benefits fit in?

Labour tensions Shortage of skilled workers

Influx of foreign companiesCompensation woes

How to attract and retain high performance staff with a limited budget? How to motivate and engage employees?

Issues Possible solutions Advantages

Attract and retain employees Good medical and insurance coverage

Work life harmony benefits (flexible working hours)

In-house training

Foreign language classes

Team building activities and company events

Share information on company’s directions, challenges, objectives and expectations to staff

Perquisites

Lower cost

Group buying power

Ensuring health and wellness of employees allowing for greater productivity and motivation

Employee learning and development

Employee engagement

Clear career development plan to retain high performance staff

Personal touch that allows company to build employer brand to attract and retain

Motivate and engage employees

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Products to meet every stage of our clients’ needs

Prevalence data, MBM & Peer Cuts

Benchmarking

Valuation

Plan

Design

Clients who want market information

High volume, low returns

Low volume, high returns

Benefits survey participants who want

to better understand and compare their

policies with the market

Benefits survey participants who want

to redesign their benefits policies

Regional Benefits Management clients

TRS clients

ProspectsBroking clients

Mercer Gold clients

Benefits SurveyMercer BenefitsMonitor

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About Mercer’s Benefits Survey

Annual comprehensive benefits survey across 15 APAC countries

Access to the benefits survey report is via our online application, Mercer BenefitsMonitor (MBM)

Membership is one year beginning from the date of access

MBM is a rolling database and is updated twice yearly – Jan and July.

Clients are able to submit data outside of the data survey cycle

– Data will then be updated in MBM in the next scheduled upload.

All Mercer.com users have access to MBM via the link http://home.mercer.com/IPS/Prod_Info/benefits/BenefitsMonitor_APAC.asp

2010 Australia/ New Zealand

China All other countries

Data Submission Deadline

26-Apr-10 15-Jun-10

(1st tier ciities)*

10-May-10 (Tian Jin)**

30-Apr-10

Data Delivery Date

25-Jun-10 30-Sep-10 31-Jul-10

2010 2nd Cycle (All countries excluding Australia and New Zealand)

Data Submission Deadline 29-Oct-10

Data Delivery Date 31-Jan-11

Survey Cycle

First Cycle

Second Cycle

* China 1st tier cities – Beijing, Shanghai, Guangzhou and Shenzhen

** With the exception of Tian Jin, there is no fixed schedule for submitting data for China’s second tier cities.

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About Mercer BenefitsMonitor a user-centered online tool that offers flexible & intuitive features for benefits reporting and analysis

Advantages of MBM One stop source for market & statutory benefits information from 15 APAC countries

Fast & convenient access to data according to the level of detail required

Run analysis versus standard and custom defined ‘peer groups’ – easily benchmark against competitors of choice

Indefinite number of reports can be generated

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MBM: Types of Benefits reports

General, high level reports Trends and statutory updates PDF

Spotlight Report– Provides an overview of key benefits

practice trends in the general market. – Represents all industries– Statutory overview

Benefits Prevalence Report (BPR)– Side by side comparison of your

organization’s benefits policies against aggregated statistics of selected peer groups

Detailed Benchmark Report (DBR)– Provides exact details of the benefit plans

of a custom peer group of choice– Side by side comparison of benefits

provided by different employers

Specific, detailed reports Aggregated or side by side

comparison of benefits plans PDF and/or Excel

BPR peer group limit: min.12, no limit. DBR peer group limit: min. 8, max 25

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MBM: Other features to look out for!

Global Benefits Legislative Updates (GBLU)– Updated monthly

Benefits Plans Around the World (BPAW)– Updated twice yearly

Benefits Newsletter– Updated quarterly

Snapshot survey / Quick Poll results

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MBM: Subscription packages and pricing

Standard Subscription

This subscription package includes:– Spotlight on Benefits Report– Access to aggregated reports (BPR)

of ‘All Industries’ group report– One password to Mercer

BenefitsMonitorTM for 12-month access

Premium Subscription

This subscription package includes:– Spotlight on Benefits Report– Access to aggregated reports (BPR)

of ‘All Industries’ group and one available industry cut

– Access to aggregated (BPR) OR side by side (DBR) reports of 1 customized peer group (approved by Mercer)

– One password to Mercer BenefitsMonitorTM for 12-month access

• Additional customized peer groups will be charged at USD 600 per peer group

• Additional passwords will be charged at USD 300 per password •Local clients: 1 password

•Regional clients: 1 access per country subscribed and one regional access

•Global clients: unlimited access

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Pricing

Specific Sections Benefits non-participants

Working Conditions

Insurance benefits

Retirement benefits

600 each

Leave benefits

Vehicle benefits

800 each

Health benefits 1200

MBM (full benefits reports) Standard Premium

TRS Non-TRS TRS Non-TRS

Australia or New Zealand 1000 1000 1750 1750

All other countries 1000 1250 1750 2500

Spotlight on Benefits Benefits non-participants

Australia 1100

New Zealand 670

All other countries 800

5% discounts apply for purchase of MBM in multiple countries or purchase of more than 3 benefits sections.

Cost of peer group is USD 600 regardless of participation in benefits survey

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Demo video

Benefits projectsFrom information to consulting

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Benefits project opportunities / winsBenefits benchmarking Data collected can be readily used for the following projects:

– Benchmarking - Valuation– Harmonization - Employee benefits design review

Example 1

Company: Canon

Objectives: To conduct both internal and external benchmark for 9 countries

Why we won:

• Large benefits database across 15 countries

• Comprehensive benefits reports that typically cover at least 90% of clients’ queries

• Advanced technology (MBM) that allows for quick turnaround time

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Benefits project opportunities / winsBenefits valuation

Example 2

Company: HP

Objectives: Wanted to calculate the value of their benefits packages in Malaysia and Singapore

Why we won:

• Technical expertise

• Large database

• Globally recognized methodology

• Advanced technology that allows for quick turnaround time.

New valuation product/service

will be officially launched in August

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Benefits project opportunitiesBenefits Plan Design

Review current programs to identify if they are value for money and to determine where immediate cost savings can be achieved through cost-sharing, eligibility, coverage and scope changes.

Benchmark plans to ensure that they are not more generous than they need to be and remove coverage for luxury items.

Consider more cost-sharing or limits for inpatient and outpatient expenses to help save money while providing employees with a financial incentive to manage their own health care costs. Evaluate harmonization of benefits where multiple operations/entities exist in one country with different benefit designs.

Review local plan design to ensure it is in line with your regional benefit strategy. Cost savings are available when inconsistencies are removed and benefits are restructured to a more sustainable level.

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Conduct an analysis on the key benefit plan cost drivers to identify the underlying root cause.

Understand how to use your health management program to contain costs, improve productivity and impact positively on talent management.

Put your current health management measures under the microscope to determine the gaps and inefficiencies in your current program.

Determine the health risks in your employee population.

Assess the ability of your health and wellness measures to cope with those risks.

Create an integrated health and wellness program that addresses the main risks in your employee population.

Benefits project opportunitiesHealth Risk Management

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Benefits project opportunities / winsCase Study

A US based multinational with a large operation in India was facing rising health plan cost increases of 45% per year with little incentive for employees to manage costs. Additionally there were significant gaps in coverage based on employee needs/health risk; however given the economic down turn there was no budget to add new components. Mercer developed and is implementing a 3 year plan with short, medium and long term cost containment/health risk management elements which will generate immediate savings of USD$1,000,000. Mercer was able to achieve this by:

– Facilitating the development of an integrated benefit and health strategy;– Identifying spend that did not support organisational objectives;– Redesigning the employee benefit program to refocus monies/resources from

treatment to prevention through plan design– Introducing and implementing a positive health program– Identifying a strategy to make employees smarter consumers of health care– Identifying ROI metrics

Marketing Resources

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Sites where you can find benefits sales information

Mercer Link

http://home.mercer.com/IPS/Prod_Info/benefits/BenefitsMonitor_APAC.asp

Contains marketing materials for consultants and link to access MBM APAC

iMercer

http://www.imercer.com/content/asia/mbm.aspx

Information on MBM

MBM APAC link for clients access

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Marketing Resources

– Benefits Cheat sheet (New!)– Compendium of Benefits survey by country or Asia Pacific (with participant list, table of

contents etc) (New!)– Benefits and MBM Brochure– MBM Flyer– Powerpoint presentation on Introducing MBM– PDF of ‘Introducing MBM’– Sample reports– Launch of MBM PPT with screenshots (for events)– MBM Clip/Demo – Point of View articles– Press releases– Mercerlink

Consultant User Guide Client User Guide Client and Consultant FAQs

– Training– Webinars– Guide to filling DCKs

Q & A session

Appendix

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Regional Benefits Strategy & Plan Design

Benefit Plan ObjectivesFor Design, Delivery, Financing and Risk

Management

Governance Structure/ProcessesIncluding Roles and Responsibilities / Accountability / Decision Making (Local vs. Regional vs. Global) – “Rules of the Road”

Design(e.g., positioning, core

benefits)

Delivery(e.g., insurer/vendor

relationships, communication, administration)

Financial(e.g., multinational

pooling, cost containment, insurance

vs. self insurance)

Risk Management (e.g., health, statutory

and accounting requirements)

Tactical

Strategic

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Plan DesignCost containment - possible solutions

Health Management Solutions

Financing Solutions

Delivery Solutions

Design Solutions

Flexible benefits and defined contribution structures

Coverage and benefits scope

Cost sharing

Individual worksite programs

Eligibility

Insurance pricing and negotiations

Health vendor pricing and negotiations

Self insurance and profit sharing

Multinational pooling and use of captives

Cash flow management

Administration outsourcing

Regional broking

Vendor management

Claims management

Consumerism education

Wellness

Health risk management

Disease management

High cost case management

Absence management

Cost Shifting (to Employees)

Cost Management

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Regional Discount Structure

DISCOUNT is based upon total spend value ($) & is an incremental discount % based on a 'tier' system – not limited to benefits alone and is applicable for centralized billing only

Total Spend Value (USD) Discount (%)

< 5,000 0%

5,001-10,000 5% saving on $5,000

10,001 -20,000 10% saving on the next $10,000 increment

20,001 – 50,000 15% saving on the next $30,000 increment

50,001 – 100,000 20% saving on the next $50,000 increment

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Regional Discount Structure: An Example

Breakdown of Total Spend value (USD 30,000) Discount (USD)

$5,000 0

$5,000 =5% * 5,000 = 250

$10,000 = 10% * 10,000= 1,000

$10,000 = 15%*10,000= 1,500

Total spend value = USD 30,000 Total Discount = USD 2,750