Edouard Merette, managing director (Asia), William M Mercer, was speaking on employee benefit programmes, and the top HR managers of at least 60 private and public sector companies gathered at the venue to pick up the how's and why's of the new initiatives. (William M Mercer is a global consultancy firm and its main business is in the area of ``benefits''.) Although the benefit plans discussed were very attractive, and the participating managers quite keen to implement them in their respective organisations, it was quite clear that bureaucratic bottlenecks had to be cleared first.

Nevertheless, Mercer's Merette was quite bullish that benefit plans would be a success in India, even if it took time to introduceit. And the Indian corporates, too, looked hopeful that once the insurance sector opened to foreign players, designing retirement benefits, pension schemes and health plans would become easy.

As of now, the participants went home convinced that benefit plans were quite relevant for both the employer and the employee. For the employer, it is an excellent retention tool, and for the employee, well, a range of benefits. The primary idea is to give maximum returns to the employee, whether in terms of retirement benefits, healthcare or in any other form.Look at the Mercer compensation philosophy, for instance. Giving an example, Merette says that suppose ABC is a company committed to maintaining a fair, competitive and efficient total compensation programme, which will enable it to attract, retain, motivate and recognise the qualifications and quality of the personnel it requires to fulfil its objectives. In such a case, Mercer's total compensation programme will attest to ABC's belief that employees are acompany's most valuable resource, says Merette. Total compensation includes base pay, performance rewards, premium payments, benefits and retirement plans, he explains. And through this kind of a compensation programme, ABC will ensure that its employees are treated fairly and equitably, Merette adds.

Elaborating on the compensation philosophy that Mercer is marketing in India, Merette says that the programme should be competitive within the industry. Also, to the extent possible, it should be tax effective.So, if a company, say for instance ABC, implements the total compensation philosophy in its organisation, the benefits will be something like this.First of all, says Merette, ``ABC will offer a comprehensive benefit programme for its employees and their dependents, which will provide adequate protection in the case of illness, disability or death.''Among other things, ABC's benefits programme will recognise that employee needs are diverse and will allow for as much flexibility as possible within anacceptable administration framework, suggests Merette.

Plus, the ABC benefits programme will include controls over escalating costs, adds Merette.

Coming to a very crucial aspect of the benefits plan--retirement income--Merette says that it is one of the most significant chunks in benefits management, and that employers must keep in mind the requirements of the employee's post-retirement plans. For that, preparation should begin as early as possible.

At least, he says, organisations should know what the increases and decreases in spendings are after retirement. In the list of decreases, Merette puts taxes, retirement savings and work-related expenses. In the list of increases, he puts health-related expenses and leisure travel. And according to a survey conducted by the Mercer group, the expenditure on travel and health after retirement typically constitutes almost two-thirds of an individual's income in the US. Talking of India, he says that the estimate will be quite close to that in the US. That onlymeans that retirement income should be upped considerably to balance out the expenditure incurred on healthcare in old age, particularly with longevity climbing northward.

Again using ABC as an example, Merette talks about the retirement income philosophy and how it works. As a first step, ABC recognises that it has some responsibility towards ensuring that long-term employees and their spouses have an adequate income after retirement. This responsibility is shared with the employee.

Thereafter, ABC views its pension programme as a reward for long service and not as deferred compensation, says Merette. And it is ABC's goal to fund a satisfactory programme that includes inflation protection both before and after retirement, within its ability to pay.

Touching upon another important feature of an ideal retirement income scheme, Merette says that ABC's retirement programme should be flexible enough to enable the company to plan its human resources needs effectively by providing opportunities for earlyretirement.

Plus, ABC must not have different pension plan rules for different groups of employees. Any future changes should apply equally to all employees, recognising historic practices and precedents.

Therefore, any organisation aiming to follow in the footsteps of ABC in offering the best in employee benefits, should ask themselves these questions: Does retirement benefit mean wealth accumulation or income replacement; how much should be provided; who should bear the risks; how much can we spend; for whom and when. The answers to these questions will lead the organisations towards a unique system of benefits for their employees.