Uniting a Workforce – the Benefits of Benefits B
Broker Perspective
Matthew Judge Technical Director
matthew.judge@
jelfgroup.com
It is widely accepted that maintaining employee motivation and engagement is vital to the overall success of any merger or acquisition. Of course, this can be a challenge at the best of times, let alone when going through major corporate change. However, used wisely, an employer’s reward and benefits programme can be a valuable tool to help with the transition.
Matthew Judge is Technical Director at Jelf Employee Benefits, part of Jelf Group Plc. He has been with Jelf for six years, initially heading up the corporate healthcare team before moving into his current role. As Technical Director, Matthew uses his vast experience of working with a wide range of businesses to help develop Jelf’s service proposition for employers.
Matthew has been involved in the independent healthcare industry for over 30 years. During this time he has worked on both the insurance and intermediary sides of the industry, giving him a rounded view of the employee benefits market, the types of solutions employers require, and how these have evolved over the years. Matthew previously ran an independent healthcare broking and consultancy firm for a number of years, which became part of Jelf. Having worked with both large corporates and SMEs, he is familiar with the unique issues faced by each.
Pensions and employee benefits can be highly complex and emotive issues - and this is just one of many areas in the spotlight when undertaking the huge task of bringing two businesses together. To get it right, it is vital for HR and benefits teams to be involved in the process as early as possible.
The initial due diligence process is, of course, crucial. Where the deal involves employees moving organisation under a TUPE (Transfer of Undertakings (Protection of Employment)) arrangement, generally speaking, no changes can be made to employee benefits within the first 18 months – unless something of similar or greater value is being offered instead. Some changes you wish to implement may require a formal consultation process with employees.
Other than any legal requirements, there is no right or wrong answer for how best to approach pensions and employee benefits after a merger or acquisition. Getting the right solution will come about through careful analysis, expert advice and open communication with employees.
What do we have and what do we want? A benefits audit should be the first stage in the process. What does each organisation offer? What are employees contractually entitled to? As well as looking at pay, pensions, employee benefits and any other incentive schemes, it is important to consider employee expectations – and the overall HR and business objectives of the newly combined organisation. In addition, to help make sure your desired outcome keeps you market competitive, it may also be prudent at this stage to review how your competitors and comparable sector are approaching benefits.
The audit will also need to look at how the various pension and benefits schemes are managed, administered and communicated, and who is responsible for providing advice to the company (and, for occupational pension schemes, the trustees) in relation to each scheme or benefit.
The reality is that a specialist adviser, such as Jelf, will often be best placed to carry out such an audit, helping you reach a position where you know a) what you have currently, and b) the ideal end situation you are aiming for. You can then start to plan how best to get from A to B.
Benefits harmonisation
For many organisations, having unified pension and employee benefits schemes across the entire business is the ideal. However, in practice, this can often be difficult to achieve quickly. Attitudes towards benefits – both from the employer and the employees – may have varied greatly between the two businesses.
Then there will be the differences in the underlying benefits packages themselves. This could range from having a similar package, but with differences in levels and coverage, to providing an entirely different range and amount of benefits. Even where a particular benefit appears on the surface to be the same across the two businesses, extreme care should be taken when reviewing each policy’s terms and conditions. These will often vary greatly depending on the specific provider and the date the arrangement was originally set up. When getting into this level of detail, you should seek advice from professional advisers such as Jelf.
54 Author Viewpoint
Risk and Insurance in Private Equity and M&A 2012/13
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