Alexander Mann Solutions took a more commercial approach to its last review of its employee benefits package, which included scenario modelling and much tougher negotiations with its adviser, Thomsons Online Benefits, to achieve a cost-effective result.
This was prompted by the revelation of an eye-watering private medical insurance (PMI) premium for the year ahead. The shock resulted in a review of how the policy was being used.
Ruth Smyth, head of HR at the recruitment firm, says: “We were facing a 25% increase in premium because of a high number of employees making low-level claims for physiotherapy appointments, for example, and there was no excess on our plan.
“The size of the premium and the cost to our business was a significant amount for us to absorb as a business.”
Smyth and her team used scenario modelling to calculate a range of possible solutions which would allow the retention, rather than removal, of the PMI cover. Variables used for the modelling included variations in the level of cover to help cut the premium.
“We made the decision that we should influence premiums by introducing an excess of £100, which kicked in on 1 April,” says Smyth.
She adds that a health cash plan, provided from Health Shield, has also been introduced as a voluntary benefit for employees, which Alexander Mann is subsidising to the tune of £30 a year per employee.
To ensure the right result for the organisation’s 1,500 employees, it hosted a beauty parade of cash plan providers. In October last year, it also launched a six-month review for its group personal pension plan (GPP). This has resulted in a switch in provider from Friends Life to Aviva, which took effect on 1 April.
As part of the move, Alexander Mann has reduced its pensions annual management charge (AMC), which was a key factor driving its review. Smyth says: “This year, more than most, we have been working our advisers hard.”
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