GE harmonises flexible benefits

Multi-sector giant GE faced a huge challenge in trying to harmonise perk for its 19,000 employees and the key was a new flexible benefits scheme

GE introduced a flexible benefits scheme for its entire 19,000-strong UK workforce last November in an effort to harmonise the benefits it offers across its four main business divisions (see below).

Before the arrival of the scheme, which is called FlexChoice and provided by Vebnet, each of the businesses operating within the four divisions, which span the aviation, healthcare, energy solutions and finance sectors, ran their own, separate payroll, HR, and compensation and benefits teams, and the benefits they offered varied widely.
For example, employee access to GE’s 30-plus mostly defined contribution (DC) pension schemes and private medical insurance (PMI) plan was inconsistent across the group.

Core levels of benefits now available to all GE employees via FlexChoice include PMI, provided by Cigna HealthCare, life assurance, group income protection (GIP) and two DC pension schemes provided by Legal and General and Aviva, respectively. A third DC scheme, provided by Phoenix Life, is closed to new members.

GE also offers a range of voluntary benefits through FlexChoice, including childcare vouchers, bikes for work, life insurance for employees and their partners, gym membership and travel insurance. A health reimbursement plan offers staff £60 each to spend on products and services to keep them healthy, such as trainers or exercise equipment.

Employees also have access to a health and wellbeing savings scheme, with GE matching staff contributions up to a maximum of £300.

Kerrie Rowland, UK pensions and benefits manager at GE, says: “Flex was the tool with which we could deliver the harmonisation and at the same time offer flexibility. For example, for those who had never had medical benefits before, if they didn’t want to have these going forward and [wanted to] maintain the status quo, that was absolutely fine. The scheme allowed for them to take the baseline benefit through flex and then flex up.”

GE also restructured its pension arrangements before launching the flex platform. This involved consolidating its 30-plus schemes, which were mostly DC. In addition to its DC schemes, GE now has six defined benefit (DB) plans that are all closed to new entrants.

Boosted take-up

Rowland says the closure of GE’s DB pension schemes to new members helped to boost the take-up of benefits under FlexChoice, which stood at 96% in year one. “The take-up for year one was phenomenal and was largely because we closed the DB plan and people had to go in and tell us which pension plan they wanted to be a member of. If they didn’t go in and tell us they wanted to continue being a member of the DB plan, they would have to be defaulted out [of the scheme], the default being the DC plan.”

GE is currently recruiting employee volunteers as ‘pension pioneers’ to help it communicate its pensions strategy more consistently across the business, as well as to relay employee concerns and queries back to the organisation.

Despite its success in communicating its pension schemes, Rowland says communication was one of the biggest challenges in implementing FlexChoice. “There are nearly 20,000 employees to be communicated to and consult with, all at the same time, on some fairly significant changes,” she says. “Even on the basics, we found our employees were very unfamiliar with considering a pension to be a benefit. To them, it is a contractual right, not a benefit.”

Exacerbating the communications challenge was the fact that so many GE sites are run as self-contained businesses in locations without internet access, nullifying email and website strategies. There were also employees who preferred traditional face-to-face consultation.

Nevertheless, Rowland says the benefits of implementing FlexChoice far outweigh the challenges. One of the biggest advantages is replacing several flex enrolment windows a year with just one.

Rowland adds: “There is one method of understanding throughout the HR department, there is one system, there is one change for everybody unless they have a life event, and a lot of the systems are connected to one another, so updates are made automatically.”

Future additions

GE is now planning future additions to its flexible benefits plan, says Rowland. “For next year, we are going to be adding a benefit from My Family Care. This is largely back-up care and also access to a provider that can find care for [employees], not just childcare but also elder care, which works well for our diversity objectives.

“We will also be expanding the health reimbursement account. Other than that, we don’t anticipate too many changes into year two because, with a flex plan, you just need to be there to work on comfort levels and you can’t do that if you are constantly changing the plan.”

GE’s expansion of its health reimbursement account will see the plan repositioned to focus on employees’ lifestyles and work-life balance, with the account possibly being renamed to reflect this shift. This means employees will be able to use the benefit to pay for treatments designed to improve work-life balance, such as acupressure and massage, as well as for relevant further education courses.

GE also plans to enable employees to use health reimbursement to fund gym membership. Rowland says: “We have looked at what our overall objective is and what we are trying to achieve with this account, and the point is, we are trying to say to employees that we want them to be healthy and have a life outside of the organisation which is supported by GE.”

GE’s implementation of FlexChoice resulted in it being highly commended in the ‘Most effective use of a flexible benefits plan’ category at the 2012 Employee Benefits Awards.

GE at a glance

General Electric Company (GE) is a global organisation comprising four main business divisions: technology infrastructure, which includes healthcare, security and aviation products and services; energy infrastructure, incorporating the manufacture of oil, gas and wind technologies; GE Capital, which provides financial services; and NBC, the media arm that is involved in the production and distribution of films, television shows and news.

GE began life in the US in 1892, when inventor Thomas Edison merged his company, Edison General Electric, with competitor the Thomas-Houston Company to form General Electric.

Since then, the organisation has grown steadily and now employs 300,000 people worldwide. Of these, more than 19,000 are located in the UK in 45 locations, including two global headquarters, GE Healthcare in Amersham and GE Money in London, and 25 manufacturing sites across the country.

GE has invested £10 billion in UK businesses through acquisitions since 2002.

Profile: Kerrie Rowland

Kerrie Rowland joined GE in October 2011 as UK pensions and benefits manager.

She moved to GE after spending five years at Shire Pharmaceuticals as global reward manager. During her time at Shire, Rowland designed benefits plans for 22 new locations the company opened across the globe.

Her previous roles include global reward manager at financial management firm Merrill Lynch, focusing on Europe, the Middle East and Africa (EMEA).

She was also the first pensions manager at law firm Allen and Overy, which hired her because it wanted to close its defined benefit (DB) pension plan and open a defined contribution (DC) scheme for new members.

Read more from the flexible benefits supplement