Shopping at the “company store”

Question

I have friend in my company who works in human resources. She keeps going on about how important the company match is. What is she talking about?

Answer

We used to call it “shopping at the company store.” Before the online revolution my partner and I would flip through the actual employee benefits handbook to see how we could best enjoy the perks of working at a big company. Massage, orthotics and eyeglasses were some of the things on the list. But your friend is right, the big benefit is the company match and it is no wonder she is prodding you about it.

A company match made in heaven

A middle manager I know worked at the same company for 20 years. It was only when he was laid off that he realized he had missed out on about $100,000 because he hadn’t taken advantage of the company match during his years of service. He had seen the paperwork, but never ticked the box to confirm his participation.

Many companies offer to match your contribution to a Group RRSP. The numbers differ depending on where you work, but here’s an example: If you put in 5% of your salary into the group RRSP, they may match that contribution one to one. New hires often choose the lowest contribution amount because they feel like they can’t spare the cash. But as they get older and lose their new hire shine, these same people often forget to change their selection on the form.

Employees definitely underutilize the company match for Group RRSP plans, says Melanie Jeannotte, managing partner at consulting firm Vital Benefits. “Most plans are not auto-enroll, whereas traditional pension plans usually are, so employers have to work really hard at engagement.”

It’s worth noting that Group RRSPs limit your options to a handful of mutual funds that may charge higher fees than you’re comfortable paying. These funds may not even deliver the performance you’d like. Even still, you’re not going to be able to beat the matching program. Here’s why: When a company matches your contributions it can double your money—a 100% return if the match is one-for-one, which many are.

Even if you are in a fund with a high MER and average performance, doubling your money with the match still makes it the right strategy. Some matching programs are less generous, of course, but it the point is the same. You are simply leaving free money on the table.

Shopping at the company store

If you deal with stress at work or have chronic pain you may have sought out the services of a massage therapist over the course of the year. You would have needed a doctor’s note to have those receipts reimbursed, but have you checked to see if you’ve used up your entire amount? If you haven’t, schedule a massage before the end of the year to help you manage holiday stress.

If you don’t take the time to learn what your benefits are you could be missing out on a lot. I am a runner and the company I used to work for covered orthotics. I needed these inserts to prevent injury, but I would get lazy about having myself fitted for a new pair every few years. You may be entitled to new eyeglasses, but lazy about getting them replaced. Perhaps your company offers a stock purchase plan you’ve never accessed or perhaps it covers counselling that you and spouse have been talking about for years, but have never made it to the therapist’s couch.

Employee assistance plans (EAPs) are often underused. Jeannotte says, “There is a perception that EAPs are counselling plans, but they do a lot more than that in terms of access to professionals like lawyers, dieticians, financial advisers, and eldercare specialists. They also often have robust websites where employees can order books and CDs at no cost.”

I’m not talking about gaming the system. I’m talking about knowing what your benefits are and then taking advantage of what you are entitled to as an employee. Most of them can’t be carried over from year to year so they disappear at the stroke of midnight on Dec. 31.

There are exceptions, says Melanie Jeannotte. “Vision generally can only be claimed only once every two years, and orthodontic coverage generally has only a lifetime benefit.” Some companies offer what are called health care spending accounts that you may allow you to roll over unused benefits for up to one year. This, Jeannotte says, “is a nice feature as it allows employees to budget for larger ticket items like glasses or major dental work.”

Profiting from the perks

Here are some suggestions on things you can do to profit from the perks:

Enroll in your benefit plan member website. This allows you to do everything you need in one stop: Check your plan design, account balances, claims status, wellness resources, submit claims electronically and sign up for direct deposit of reimbursements.
Go online and review the benefits “shopping catalogue.” What are you entitled to that you could benefit from but haven’t used?
Be a savvy healthcare and dental care consumer so that you can preserve your core benefit accounts and health care spending accounts.
Make a move before year-end. For example set up a massage appointment, get a new pair of eyeglasses etc. Or call your HR rep and have them increase the amount of your Group RRSP contribution and company match.