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Benefits and Pensions MonitorJan Neiman Manager, Benefits and Pensions Rothmans, Benson & Hedges Inc.Jan Neiman has been with Rothman’s Benson & Hedges Inc. for 15 years and is currently manager of benefits and pensions. She is responsible for the benefits and pension plans, communications, and the administration of both the DC and DB pension plans. She is a member of the Association of Canadian Pension Management and the Canadian Pensions and Benefits Institute and recently sat on the planning committee for the ACPM 2003 annual conference, which was held in New Brunswick in September 2003. Flexibility is the best word to describe the pension and benefit plans at Rothmans, Benson & Hedges Inc. (RBH), a Canadianowned, publicly-traded tobacco company. In total, RBH has more than 800 employees across Canada and 500 of those are salaried. The 300 unionized employees have a Defined Contribution pension plan and a health benefits plan structured through bargaining. The salaried employees have a flex benefit plan and a choice of a Defined Contribution or a Defined Benefit pension plan. The unique feature of the salaried pension plan is that employees have the option to switch from one to the other once within their RBH career.
Push Towards DC The pension plan was developed in 1987, just after the merger of Rothmans and Benson & Hedges in 1986. Back in the ’80s, there was a push towards DC plans “because market rates were so great people thought they could manage their investments themselves. And, that was probably true back then,” says Jan Neiman, manager, benefits and pensions. Now the company offers a series of communication projects on the plans and finds that more DC members switch over to DB once they learn a little more about both types of plans. The pension plan is currently in a surplus position and on a contribution holiday. Aside from the basic DB and DC plan, RBH also offers a secondary level group pension plan to its members. The basic plan is 100 per cent employer paid and, on the secondary level, RBH will match member contributions by 50 per cent. RBH’s provider offers a website and call centre as well as financial advisors for pension plan members. RBH also has its own website available. “There is a tool on the website that will actually let you plug in some parameters and it will come back and tell you what you can expect from your DB versus DC plan if you stay to the age of 55. It has an online statement available and is set up so members can do a lot of planning.” Neiman says more and more members are using the tool. “It’s not just a static piece of paper. Members can plug in numbers and see how, for example, inflation will affect their plan, or how much they can retire with if they save a little bit extra each month with the secondary level pension plan.” The health benefits plan for salaried employees is a flex benefit plan. All employees are allotted an equal amount of credits and can purchase medical and dental coverages with those credits. “We have options which provide minimal coverage for people who may have coverage from their spouses to platinum options which are really generous,” says Neiman. The original health benefits plan was also developed following the merger and was overhauled in July 2001. The previous plan had been a flex plan, but the company decided to revamp it by adding more options. After surveying employees to see what they wanted, the new plan offered improvements in vision and dental care, a health spending account, and a lifestyle spending account that members can use towards options such as sports equipment, gym memberships, and registered day-care. Revamped Plan The revamped plan was also in response to rising healthcare costs and helps members to become better healthcare consumers. “I think people might be surprised to learn that we spend $3,000 a year for them on medical and dental benefits, not just $400 or $500. It’s a lot of money. You add up all of the employer contributions and they’d probably be surprised by the ‘hidden paycheck’.” The company is working on a new ‘total compensation statement’ which will, hopefully, be rolled out early in the new year. “It’s going to show them everything that we pay and that they pay. It will include salary, bonus, what they have contributed to the pension plan, what we paid for the premiums for the group benefit plan, the stock plan – all of it.” The company also plans to convert benefits enrolment to a web-based system which will significantly reduce the in-house administration process. It hopes to have the system in place by April 2005. “RBH offers highly competitive benefits and pension plans to its employees and always keeps abreast of what is going on in the marketplace,” says Neiman. |
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