Presented by Matthew Gilligan, President, Disability RMS. (Disability RMS is the leading provider of turnkey disability risk management products and services in the US.)
- While 89% of employees in the US are covered by medical solutions (in and outside the workplace), only 58% have any form of disability coverage.
- The social security administration – whose employees have decreased by one third over the last 10 years – faces hugely increased numbers of applications for Social Security Disability Insurance (SSDI), creating a backlog that results in average delays of over 500 days before it reaches a decision.
- While the number of employers planning to offer more voluntary benefits is growing, they are increasingly shifting costs to employees. Nevertheless, most employees consider it very important that their employer offers voluntary benefits, even if the costs are shared.
Employee benefit trends and challenges: focus Europe
By Lotte Elsborg, PFA Pension, Denmark
- All over Europe, countries face growing dependency ratios. The problem is most acute in countries with falling birth rates and rising numbers of the elderly, such as Spain, Italy and Greece.
- The (Western) European market for benefit plans can be divided into regions: the Nordic area (plus Switzerland) with well-developed 2nd and 3rd pillars; Ireland, the UK and the Netherlands, with small 1st pillars; and the rest of Western and Southern Europe, which mainly depend on the 1st pillar.
- Eastern Europe is an underdeveloped market, where all three pillars are small. However, the region faces the same demographic challenges as Western Europe.
Employee benefit trends and challenges: focus Latin America
By Marcelo Assunção, Icatu Hartford, Brazil
- Insurance penetration in Latin America is 2.5%. This is an underdeveloped but strongly growing market.
- Brazil’s insurance premium per capita grew 180% in five years.
- Insurance premium per capita in Brazil rose from USD 72.2 in 2002 to USD 202.2 in 2007.
- Latin American countries can be divided into three distinct pension system groups: Central America, Ecuador, Venezuela - mainly depend on 1st pillar, supplementary plans are uncommon; in ‘Chilean Model’ countries (Argentina, Bolivia, Chile, Colombia, Peru) – social security has migrated to a mandatory defined contribution system that is privately administered; Mexico and Brazil – use a combination of social security and common supplementary plans.
Employee benefit trends and challenges: focus Asia
By Cedric Luah, Swiss Life Network, Singapore
- Asia has a high savings rate (30-40% in general), declining fertility rates, and rapidly ageing societies in key markets (e.g. China, Japan)
- Risk and medical coverages are common and benefits are moving towards Western schemes with an initial demand for flex-benefits. More expertise is now required to manage compensation and benefits, and escalating costs need more active management
- For pensions and retirement, a higher level of regulatory involvement is crucial for success. Tax treatment also needs further improvement to promote greater participation. There is a clear shift to defined contributions – with moving towards self-reliance the next step
Looking beyond global healthcare today
By Paul Marcotullio, Director Global Benefits, Citigroup
Pooling and cooperation with networks play an important role in Citigroup’s global benefit programme, both as a management and a financial tool. Their global benefit philosophy calls for a single set of programs for the group, although plan design in each country is based on the local market conditions, labour environment and legal requirements. Simplicity is also a key feature: plans should be simple to understand, communicate and administer.