FLEXIBLE

BENEFIT
Supporting Future Fit
Organization

Marsh Indonesia
Jakarta 2019

Ardianto Utomo
Table of content

01 02 03
Future of Benefit Trend Flex Model
Business

04 05
H-Connect Appendix

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Flexible Benefits Proposal

Future of Business

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 “In times of turmoil,
the danger lies not
in the turmoil but in
facing it with
yesterday’s logic..”
– Peter Drucker

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Times Are Changing
VUCA era (Volatility,
Uncertainty, Complexity
and Ambiguity). Vuca is the
new norm.
Two generations have now
grown up with Internet.
Interconnectivity is a big
thing. WeChat as 1
umbrella apps is a sample
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From AI to Machine Over half of the World
Learning, transformational Population is now younger
technology is changing the than 30 years old
landscape of how
companies conduct
business
Today workforce is more Shift to more purposeful
diverse than ever. Expect business, embracing the
greater choice, more tech digitized millennial generation,
driven and more discerning CSR, wellbeing-at-work,
diversity in the workplace,
employee empowerment,
stakeholder engagement, etc.
5
Flexible Benefits Proposal

Benefit Trend

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 I L L U S T R AT I O N
Benefit Trend
Workforce differences : different generations, different priorities

STARTING OUT INVESTIGATING CAREER & MID LIFE END OF CAREER

 Hope about future  Free agent & independence  Personal & social  Conformity
 Collaboration  Street-smarts expression  Stability
 Social activism  Friendship  Idealism  Upward mobility
 Tolerance for diversity  Cynicism  Health & wellness  Security
 Family centricity  Youth  Economic success
20 YEAR OLD 30 YEAR OLD 40 YEAR OLD 50 YEAR OLD
• Cash • Leave benefits • Retirement/ pension
BENEFITS

• Vacation • Allowances • Life & personal accident

VALUED

• Flexible working • Career progression • Medical

• Training • Childcare • Work life balance/ Wellness

Source: 2016 APAC Benefits Pulse Survey

* The above may include some generalizations of what we expect of workforce at different ages. Different companies will have different experiences depending on
various factors, e.g. location, socio-economic groups, culture and these will be uncovered as part of the implementation.
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Benefit Trend
Choice is the Key

A need to RESPOND to changing

business environment
A need to design benefits to MEET
DIVERSE NEEDS of workforce

It’s all about CHOICE. CHOICE means that

employee get the benefit they value most, while
employers get a more engaged workforce and don’t
waste any money paying for benefits that their
employees don’t actually want

WHAT IS A PLATFORM of offering benefits

FLEXIBLE Giving employees CHOICE to
BENEFITS? select their benefits

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Benefit Trend
Cafetaria Model

IDR 75 Million
Budget (Total
Reward Cost)

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Why flexible benefits

… the workforce is ….benefit spend … technology is ...you want to be in

changing and people needs to be changing the way control, trust your
need to be able to transparent and people interact with global processes
choose benefits measured their benefits and be able to make
relevant to them changes fast

IN ASIA, COMPANIES IMPLEMENT FLEX IN ORDER TO …

89% 84% 64%

Better meet needs of Create greater value from
Attract and retain talent
employees existing benefits

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Flexible Benefits Proposal

Flex Model

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Types Of Flexible Benefits Models

Modular Flex Core Plus Options P Full Flex

OPTIONS
Benefit
C
Benefit
Benefit C
C Benefit
Benefit B
Benefit B
B CORE
Benefit Benefit
Benefit Benefit Benefit Benefit
A A
A A B C

 Akin to a “Set Value Meal”
 Choice of a packaged product
 No separate choice for each
benefit
 Scalability issue
 Typical model in Indonesia
 Core minimum benefits are first
defined
 Choice of various levels of cover by
benefit
 No core minimum / safety net
 Employee is free to choose
from a range of benefits

 Or FSA only

Less choice More choice

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Flexible Benefits
Typical Flexible Benefits Framework In Indonesia

Current Benefits [cost aspect]

Core Benefits Flex Points

Basic, compulsory Spending points
benefits provided by provided by Company
Company OR employee sacrifice

Flex Points are the spending money in

the plan. They are notional money.

Use Flex points to perform Balance of Flex Points

Benefits Selections 1 2 after Benefits Selection

Optional Benefits Flexible Spending Account

Top-Up Core benefits
• Additional Life and/or Accident insurance
• Outpatient cover for dependents
• Higher inpatient cover
Others
• Dental Insurance for self and/or
dependents
• Buy and/or sell annual leave
(FSA)
Balance of Flex Points is used for
reimbursements from FSA list/menu
e.g. Vision Care, Health & Fitness,
Mobile phones, Parents’ medical, etc.
Some reimbursements are taxable, some not

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FSA Reimbursement List
SAMPLE

Health & Fitness Chinese Herbalist / Optical Dental Personal Insurance

Bonesetter / TCM

Vacation Health screening Childcare

* TCM = Traditional and Complementary Medicine

Reimbursement

Balance of Flex Points after purchase of Optional Benefits are credited to each employee’s FSA for
reimbursement from FSA list/menu (as per sample above)

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Additional FSA Reimbursement Items
SAMPLE

A Family Theme My Get-Away My Techno

MATERNITY SPA INTERNET SUBSCRIPTION

PARENTS’ MEDICAL
HOLIDAYS
(DOMESTIC AND INTERNATIONAL) COMPUTER

CHILD DAY CARE HANDPHONES

GYM BOOKS & MAGAZINES

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ABOUT MERCER MARSH BENEFITS

Mercer Marsh Benefits provides clients with a single source for managing the costs, people risks, and complexities of employee benefits. The network is a combination of
Mercer and Marsh local offices around the world, plus country correspondents who have been selected based on specific criteria. Our benefits experts, located in 135
countries and servicing clients in more than 150 countries, are deeply knowledgeable about their local markets. Through our locally established businesses, we have a unique
common platform which allows us to serve clients with global consistency and locally unique solutions.

IMPORTANT NOTICE: This document does not constitute or form part of any offer or solicitation or invitation to sell by either Marsh or Mercer to provide any regulated
services or products in any country in which either Marsh or Mercer has not been authorized or licensed to provide such regulated services or products. You accept this
document on the understanding that it does not form the basis of any contract.

The availability, nature and provider of any services or products, as described herein, and applicable terms and conditions may therefore vary in certain countries as a result of
applicable legal and regulatory restrictions and requirements.

Please consult your Marsh or Mercer consultants regarding any restrictions that may be applicable to the ability of Marsh or Mercer to provide regulated services or products to
you in your country.
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