SPOTLIGHT ON BENEFITS UNITED KINGDOM Spotlight on Benefits United Kingdom MBM % Yes This statistic shows the percentage of surveyed employers who responded positively to this question.

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SPOTLIGHT ON BENEFITSUNITED KINGDOM December 2012SAMPLESAMPLE2012 Spotlight on Benefits United Kingdom MBM Contents 1. Overview......................................................................................................................................... 2 1.1. About 2012 Benefits Survey Report United Kingdom ....................................................... 2 1.2. If You Have Questions ......................................................................................................... 3 1.3. Confidentiality ...................................................................................................................... 3 2. Participant List ................................................................................................................................ 5 2.1. Alphabetical List ................................................................................................................... 5 2.2. By Industry ......................................................................................................................... 11 3. Background Benefits in the United Kingdom ............................................................................. 17 3.1. State Benefits..................................................................................................................... 17 3.1.1. Retirement Benefits................................................................................................ 17 3.1.2. Death Benefits........................................................................................................ 18 3.1.3. Short-term Disability Benefits ................................................................................. 19 3.1.4. Long-term Disability Benefits.................................................................................. 19 3.1.5. Medical & Dental Benefits ...................................................................................... 20 3.1.6. Maternity Benefits................................................................................................... 20 3.2. General Market Practice .................................................................................................... 22 3.2.1. Retirement.............................................................................................................. 22 3.2.2. Death Benefits........................................................................................................ 23 3.2.3. Short-term Disability Benefits ................................................................................. 24 3.2.4. Long-term Disability Benefits.................................................................................. 24 3.2.5. Medical Benefits ..................................................................................................... 24 4. Statistical Results ......................................................................................................................... 26 4.1. Defined Benefit Plans......................................................................................................... 26 4.2. Defined Contribution Plans ................................................................................................ 27 4.3. Group Personal Pension.................................................................................................... 28 4.4. Stakeholder Pension.......................................................................................................... 28 4.5. Life Insurance .................................................................................................................... 29 4.6. Short-term Disability Benefits............................................................................................. 29 4.7. Long-term Disability Benefits ............................................................................................. 30 4.8. Medical Plans..................................................................................................................... 30 4.9. Annual Leave ..................................................................................................................... 30 4.10. Maternity ............................................................................................................................ 31 4.11. Travel ................................................................................................................................. 31 4.12. Company Cars ................................................................................................................... 32 4.13. Other Benefits .................................................................................................................... 32 5. Definitions..................................................................................................................................... 34 2012 Mercer LLC DecemberSAMPLESAMPLE2012 Spotlight on Benefits United Kingdom MBM 1 Overview 1.1. About 2012 Benefits Survey Report United Kingdom Mercer has collected information on benefits from a range of organisations operating across the United Kingdom. 228 organisations provided data to the 2012 Benefits Survey. This is the first launch of the benefits survey, which is a survey with data collection taking place all year round. Participants are listed in Section 2 in alphabetical order and also by industry. The contribution of these organisations is acknowledged as invaluable in the production of this report. Section 3 provides general information about benefits in the United Kingdom state and market practice on supplementary benefits to give context to the statistical survey results delivered in Section 4. Section 4 provides a summary of the key results of the benefits survey, where the median value (50th percentile) is used to demarcate prevalence and values. Results are presented for simplicity in standard format tables containing the following information. 2012 Mercer LLC December2 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM % Yes This statistic shows the percentage of surveyed employers who responded positively to this question. It is relevant for some questions and not for others; where not relevant, it is left blank. Mean The sum of values is first calculated and then is divided by the number of observations. Unlike the median, the mean will be impacted by extreme low and high results. The mean itself is not an actual observation from the sample and in that sense does not necessarily reflect a typical practice. 25th Percentile (Q1) After calculating the median, the first quartile is the mid-point of the lower half of the sample. The first quartile is the score below which 25% of the cases fall and above which 75% fall. 50th Percentile (Median) The median is the mid-point of a range of figures. It is calculated by sorting all the values into ascending order then locating the value above which 50% of the scores fall and below which 50% of the scores fall. 75th Percentile (Q3) After calculating the median, the third quartile is the mid-point of the upper half of the sample. The third quartile is the score below which 75% of the cases fall and above which 25% fall. Unless otherwise stated, local currency is used. In order to facilitate your understanding of the benefits information provided in our surveys, a glossary containing definitions of benefits and statistical terms is provided in Section 5. 1.2. If You Have Questions If you have questions regarding the survey or the report, call us or e-mail us at: +44 20 7178 3172 Neil Hurst Neil.Hurst@mercer.com +44 20 7178 5649 Oxana Nagy Oxana.Nagy@mercer.com +48 22 456 40 83 Anna Szczerbak Anna.Szczerbak@mercer.com 1.3. Confidentiality To ensure the confidentiality of all data, a minimum number of observations is required in order for statistics to be displayed. Three organisations must report at least three observations for a variable in order for the mean to be displayed. Four organisations and four observations are required for display of the median. Five organisations reporting at least five observations are required to display 25th and 75th Percentiles. Where there has been insufficient data for analysis, this has been indicated with --. Human Resource professionals who deal regularly with surveys are aware of the variance that may exist in survey data. Data may fluctuate slightly from year to year due to changes in the participant base. It is also important to note that within a sample, a significant amount of data may be reported by one organisation. It is also possible for data to change drastically from year to year due to industry-related factors and economic conditions. 2012 Mercer LLC December3 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Mercer is providing this survey information to its clients to permit them to make independent decisions regarding salaries and benefits. Because the exchange of salary and benefit information among competitors may be construed in certain circumstances as a means to facilitate an antitrust violation, Mercer has taken appropriate steps in collecting and disseminating this information in order to avoid such perceptions. The information and data contained in this report are for information purposes only and are not intended nor implied to be a substitute for professional advice. In no event will Mercer be liable to you or to any third party for any decision made or action taken in reliance of the results obtained through the use of the information and/or data contained or provided herein. 2012 Mercer LLC December4 of 37SAMPLESAMPLE2012 Spotlight on Benefits United Kingdom MBM 2 Participant List 2.1. Alphabetical List Organisation Name Industry Name AB Mauri FoodAccellent Medical Equipment and SuppliesAccenture High-Tech Other or CombinationAccolade Wines Beverage and TobaccoActavis UK PharmaceuticalADVA Optical Networking TelecommunicationsAetna Global Benefits Europe Insurance Health and MedicalAlbert Browne UK Medical Equipment and SuppliesAlexion Pharma International Services PharmaceuticalAlfa Laval MachineryAlly Financial Finance/Banking Other or CombinationAmmeraal Beltech Plastics and Rubber ProductsAmway Europe Consumer Goods Other or Combination Amway UK Consumer Goods Other or Combination Arch Chemicals ChemicalArch UK Biocides ChemicalArla Foods FoodAsiaInfo-Linkage H.K. Systems UK Branch High-Tech Other or CombinationASM UK Sales High-Tech Other or CombinationAtlantic Plastics Plastics and Rubber ProductsAvon Cosmetics Consumer Goods Other or Combination Bacardi Martini Beverage and TobaccoBang And Olufsen UK Consumer Goods Other or Combination Barry Callebaut UK FoodBASF ChemicalBaxi Heating UK Machinery 2012 Mercer LLC December5 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Organisation Name Industry Name Baxter Healthcare Medical Equipment and SuppliesBE Aerospace High-Tech Other or CombinationBeam UK Beverage and TobaccoBissell Homecare Overseas Electrical Equipment, Appliance, and Component BMW Group Financial Services Finance/Banking Other or CombinationBMW UK Transportation Equipment AutomobileBMW UK Manufacturing Transportation Equipment AutomobileBoeing UK Transportation Equipment AerospaceBoots UK RetailBosch Siemens Home Appliances Electrical Equipment, Appliance, and Component BP International Oil & Gas DownstreamBristow Group Utilities EnergyBRITA Water Filter Systems Consumer Goods Other or Combination British American Tobacco Beverage and TobaccoBritish American Tobacco UK Beverage and TobaccoBritvic Soft Drinks Beverage and TobaccoBurberry ApparelBurger King Corporation FoodBusiness Connexion Services Other or CombinationCapital Group Companies Global Finance/Banking Other or CombinationCargotec MachineryCarl Zeiss High-Tech Other or CombinationCarlsberg UK Beverage and TobaccoCBee Europe Consumer Goods Other or Combination Cereform FoodCheckpoint Systems Computer and Electronic ProductsChemetall ChemicalChiquita Brands FoodCinetic Landis MachineryCoca Cola Enterprises Beverage and TobaccoColgate-Palmolive UK Personal CareCorn Products UK FoodCorning TelecommunicationsCP Kelco UK ChemicalDanfoss MachineryDanfoss Heat Pumps MachineryDanfoss Randall Electrical Equipment, Appliance, and Component Danone FoodDeere and Company European Office MachineryDENSO Manufacturing UK Transportation EquipmentDENSO Marston Transportation EquipmentDENSO Sales UK Transportation Equipment Auto PartsDiageo Beverage and Tobacco 2012 Mercer LLC December6 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Organisation Name Industry Name Dr Reddys PharmaceuticalDr Reddys Laboratories PharmaceuticalElementis ChemicalEnerflex UK Oil & Gas UpstreamESB Energy International Utilities EnergyEstee Lauder Cosmetics Personal CareFederal-Mogul Transportation Equipment Auto PartsFederal-Mogul Aftermarket UK Transportation Equipment Auto PartsFederal-Mogul Bradford Transportation Equipment Auto PartsFederal-Mogul Camshaft Castings Transportation Equipment Auto PartsFederal-Mogul Coventry Manufacturing Transportation Equipment Auto PartsFederal-Mogul Friction Products Transportation Equipment Auto PartsFerrero UK FoodFIAT Industrial MachineryFives North American Combustion UK MachineryFives Stein MachineryFoster Wheeler Energy Energy Other or CombinationGallaher Beverage and TobaccoGambro Lundia High-Tech Other or CombinationGardner Denver MachineryGates Power Transmission Consumer Goods Other or Combination General Mills UK FoodGeneral Motors UK Transportation Equipment AutomobileGetinge Medical Equipment and SuppliesGiesecke & Devrient GB High-Tech Other or CombinationGivaudan UK ChemicalGlaxoSmithKline UK Healthcare Consumer Goods Other or Combination Goodyear Dunlop Tyres UK RetailGrundfos Pumps Wholesale DistributionH J Heinz Company FoodHalliburton Worldwide Oil & Gas UpstreamHasbro Consumer Goods Other or Combination Hella HLGB Transportation Equipment Auto PartsHenkel Consumer Goods Other or Combination Herbalife Europe Wholesale DistributionHickson Chemical Supplies ChemicalHilton Worldwide Hospitality/RestaurantHitachi Europe High-Tech Other or CombinationHoganas Great Britain ChemicalHoneywell Durable Goods, MiscellaneousHR Reward Partner High-Tech Other or CombinationICAP Finance/Banking Other or CombinationIKEA Retail 2012 Mercer LLC December7 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Organisation Name Industry Name IMI Cornelius Beverage and TobaccoIMI Kynoch MachineryImperial Tobacco Limited Beverage and TobaccoImperial Tobacco UK Beverage and TobaccoInstron Division of ITW MachineryInteva Products UK Transportation Equipment Auto PartsInvensys High-Tech Other or CombinationJabil Circuit UK Computer and Electronic ProductsJohn Dewar And Sons Beverage and TobaccoJohnson and Johnson UK Personal CareJohnson Controls Automotive UK Transportation Equipment AutomobileJohnson Electric International UK Electrical Equipment, Appliance, and Component JP Coats Consumer Goods Other or Combination Kallo Foods Consumer Goods Other or Combination Kellogg Company of Great Britain FoodKerry Group FoodKimberly-Clark Consumer Goods Other or Combination Kraft Foods FoodKwintet UK ApparelLanxess ChemicalLEGO Company Consumer Goods Other or Combination Levi Strauss UK ApparelLonza Biologics PharmaceuticalLOreal UK Consumer Goods Other or Combination Lubrizol ChemicalMagna Seating UK Transportation Equipment Auto PartsManitowoc Foodservice MachineryMars UK Consumer Goods Other or Combination Mauri Products FoodMead Johnson Nutrition UK PharmaceuticalMeadWestvaco Consumer Goods Other or Combination Molson Coors Brewing Company Beverage and TobaccoMonsanto UK ChemicalMoy Park FoodMusgrave Retail Partners Wholesale DistributionMusgrave Wholesale Partners Wholesale DistributionMylan PharmaceuticalNestle UK Consumer Goods Other or Combination New Balance Athletic Shoes UK Wholesale DistributionNewell Rubbermaid Europe Consumer Goods Other or Combination Norges Bank Investment Management BankingNorgren MachineryNovartis Pharmaceutical 2012 Mercer LLC December8 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Organisation Name Industry Name Novo Nordisk PharmaceuticalNovoZymes UK Consumer Goods Other or Combination Pall Europe High-Tech Other or CombinationPANDORA Jewellery UK RetailParfums Christian Dior RetailParker Hannifin Manufacturing MachineryPepsiCo UK Consumer Goods Other or Combination Perstorp UK ChemicalPETRONAS Energy Trading Energy Other or CombinationPeugeot Citroen Automobiles UK RetailPfizer Consumer Goods Other or Combination Philip Morris International Charles Stewart Beverage and TobaccoPiaggio Transportation EquipmentPraxair Surface Technologies ChemicalPrintpack Plastics and Rubber ProductsProcter and Gamble Services Consumer Goods Other or Combination PZ Cussons International Consumer Goods Other or Combination PZ Cussons UK Consumer Goods Other or Combination QVC RetailR Twining And Company FoodRanbaxy Europe PharmaceuticalRaytheon UK High-Tech Other or CombinationReckitt Benckiser Healthcare Consumer Goods Other or Combination Red Bull Company Beverage and TobaccoReichhold UK ChemicalRenesas Electronics Europe High-Tech Other or CombinationRockwell Automation Electrical Equipment, Appliance, and Component Rolls-Royce Motor Cars Transportation Equipment AutomobileRowan Companies Oil & Gas UpstreamSandoz PharmaceuticalSara Lee Coffee and Tea UK Beverage and TobaccoSC Johnson Consumer Goods Other or Combination Schneider Electric Energy Other or CombinationShell UK Oil & Gas DownstreamSidel UK MachinerySITA High-Tech Other or CombinationSKF UK MachinerySMA Solar UK Energy Other or CombinationSmiths Medical International Medical Equipment and SuppliesSolios Thermal MachinerySolutia UK ChemicalSTERIS UK Medical Equipment and SuppliesStorck Consumer Goods Other or Combination 2012 Mercer LLC December9 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Organisation Name Industry Name Syfer Technology Computer and Electronic ProductsTeliaSonera International Carrier UK TelecommunicationsTellabs High-Tech Other or CombinationTenaris Oil & Gas UpstreamTextron Transportation Equipment AerospaceThe Coca-Cola Company Beverage and TobaccoThe Gap ApparelThe Medicines Company PharmaceuticalThe Wrigley Company Consumer Goods Other or Combination Thermo Fisher Scientific Medical Equipment and SuppliesThorn Lighting UK Electrical Equipment, Appliance, and Component TI Automotive United Kingdom Transportation Equipment Auto PartsTJX Europe RetailTotal System Services Processing Europe Finance/Banking Other or CombinationTyco Flow Control UK Oil & Gas DownstreamUnilever UK Consumer Goods Other or Combination Vaisala High-Tech Other or CombinationValspar ChemicalVattenfall Wind Power Energy Other or CombinationVisteon Engineering Services Transportation Equipment Auto PartsVolex Electrical Equipment, Appliance, and Component Volvo Car UK RetailVolvo Group RetailWarnaco UK RetailWartsila UK Transportation EquipmentWDFG UK RetailWestern Union Finance/Banking Other or CombinationWhitman Laboratories Consumer Goods Other or Combination Wrafton Laboratories PharmaceuticalZurich Insurance Other or Combination 2012 Mercer LLC December10 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM 2.2. By Industry Consumer Goods Burberry ApparelKwintet UK ApparelLevi Strauss UK ApparelThe Gap ApparelAccolade Wines Beverage and TobaccoBacardi Martini Beverage and TobaccoBeam UK Beverage and TobaccoBritish American Tobacco Beverage and TobaccoBritish American Tobacco UK Beverage and TobaccoBritvic Soft Drinks Beverage and TobaccoCarlsberg UK Beverage and TobaccoCoca Cola Enterprises Beverage and TobaccoDiageo Beverage and TobaccoGallaher Beverage and TobaccoIMI Cornelius Beverage and TobaccoImperial Tobacco Limited Beverage and TobaccoImperial Tobacco UK Beverage and TobaccoJohn Dewar And Sons Beverage and TobaccoMolson Coors Brewing Company Beverage and TobaccoPhilip Morris International Charles Stewart Beverage and TobaccoRed Bull Company Beverage and TobaccoSara Lee Coffee and Tea UK Beverage and TobaccoThe Coca-Cola Company Beverage and TobaccoAB Mauri FoodArla Foods FoodBarry Callebaut UK FoodBurger King Corporation FoodCereform FoodChiquita Brands FoodCorn Products UK FoodDanone FoodFerrero UK FoodGeneral Mills UK FoodH J Heinz Company FoodKellogg Company of Great Britain FoodKerry Group FoodKraft Foods FoodMauri Products FoodMoy Park FoodR Twining And Company FoodColgate-Palmolive UK Personal Care 2012 Mercer LLC December11 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Consumer Goods Estee Lauder Cosmetics Personal CareJohnson and Johnson UK Personal CareActavis UK PharmaceuticalAlexion Pharma International Services PharmaceuticalDr Reddys PharmaceuticalDr Reddys Laboratories PharmaceuticalLonza Biologics PharmaceuticalMead Johnson Nutrition UK PharmaceuticalMylan PharmaceuticalNovartis PharmaceuticalNovo Nordisk PharmaceuticalRanbaxy Europe PharmaceuticalSandoz PharmaceuticalThe Medicines Company PharmaceuticalWrafton Laboratories PharmaceuticalAmway Europe Consumer Goods Other or Combination Amway UK Consumer Goods Other or Combination Avon Cosmetics Consumer Goods Other or Combination Bang And Olufsen UK Consumer Goods Other or Combination BRITA Water Filter Systems Consumer Goods Other or Combination CBee Europe Consumer Goods Other or Combination Gates Power Transmission Consumer Goods Other or Combination GlaxoSmithKline UK Healthcare Consumer Goods Other or Combination Hasbro Consumer Goods Other or Combination Henkel Consumer Goods Other or Combination JP Coats Consumer Goods Other or Combination Kallo Foods Consumer Goods Other or Combination Kimberly-Clark Consumer Goods Other or Combination LEGO Company Consumer Goods Other or Combination LOreal UK Consumer Goods Other or Combination Mars UK Consumer Goods Other or Combination MeadWestvaco Consumer Goods Other or Combination Nestle UK Consumer Goods Other or Combination Newell Rubbermaid Europe Consumer Goods Other or Combination NovoZymes UK Consumer Goods Other or Combination PepsiCo UK Consumer Goods Other or Combination Pfizer Consumer Goods Other or Combination Procter and Gamble Services Consumer Goods Other or Combination PZ Cussons International Consumer Goods Other or Combination PZ Cussons UK Consumer Goods Other or Combination Reckitt Benckiser Healthcare Consumer Goods Other or Combination SC Johnson Consumer Goods Other or Combination Storck Consumer Goods Other or Combination 2012 Mercer LLC December12 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Consumer Goods The Wrigley Company Consumer Goods Other or Combination Unilever UK Consumer Goods Other or Combination Whitman Laboratories Consumer Goods Other or Combination Durable Honeywell Durable Goods, MiscellaneousBissell Homecare Overseas Electrical Equipment, Appliance, and Component Bosch Siemens Home Appliances Electrical Equipment, Appliance, and Component Danfoss Randall Electrical Equipment, Appliance, and Component Johnson Electric International UK Electrical Equipment, Appliance, and Component Rockwell Automation Electrical Equipment, Appliance, and Component Thorn Lighting UK Electrical Equipment, Appliance, and Component Volex Electrical Equipment, Appliance, and Component Alfa Laval MachineryBaxi Heating UK MachineryCargotec MachineryCinetic Landis MachineryDanfoss MachineryDanfoss Heat Pumps MachineryDeere and Company European Office MachineryFIAT Industrial MachineryFives North American Combustion UK MachineryFives Stein MachineryGardner Denver MachineryIMI Kynoch MachineryInstron Division of ITW MachineryManitowoc Foodservice MachineryNorgren MachineryParker Hannifin Manufacturing MachinerySidel UK MachinerySKF UK MachinerySolios Thermal MachineryAccellent Medical Equipment and SuppliesAlbert Browne UK Medical Equipment and SuppliesBaxter Healthcare Medical Equipment and SuppliesGetinge Medical Equipment and SuppliesSmiths Medical International Medical Equipment and SuppliesSTERIS UK Medical Equipment and SuppliesThermo Fisher Scientific Medical Equipment and SuppliesAmmeraal Beltech Plastics and Rubber ProductsAtlantic Plastics Plastics and Rubber ProductsPrintpack Plastics and Rubber ProductsDENSO Manufacturing UK Transportation Equipment 2012 Mercer LLC December13 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Durable DENSO Marston Transportation EquipmentPiaggio Transportation EquipmentWartsila UK Transportation EquipmentBoeing UK Transportation Equipment AerospaceTextron Transportation Equipment AerospaceDENSO Sales UK Transportation Equipment Auto PartsFederal-Mogul Transportation Equipment Auto PartsFederal-Mogul Aftermarket UK Transportation Equipment Auto PartsFederal-Mogul Bradford Transportation Equipment Auto PartsFederal-Mogul Camshaft Castings Transportation Equipment Auto PartsFederal-Mogul Coventry Manufacturing Transportation Equipment Auto PartsFederal-Mogul Friction Products Transportation Equipment Auto PartsHella HLGB Transportation Equipment Auto PartsInteva Products UK Transportation Equipment Auto PartsMagna Seating UK Transportation Equipment Auto PartsTI Automotive United Kingdom Transportation Equipment Auto PartsVisteon Engineering Services Transportation Equipment Auto PartsBMW UK Transportation Equipment AutomobileBMW UK Manufacturing Transportation Equipment AutomobileGeneral Motors UK Transportation Equipment AutomobileJohnson Controls Automotive UK Transportation Equipment AutomobileRolls-Royce Motor Cars Transportation Equipment Automobile Energy BP International Oil & Gas DownstreamShell UK Oil & Gas DownstreamTyco Flow Control UK Oil & Gas DownstreamEnerflex UK Oil & Gas UpstreamHalliburton Worldwide Oil & Gas UpstreamRowan Companies Oil & Gas UpstreamTenaris Oil & Gas UpstreamFoster Wheeler Energy Energy Other or CombinationPETRONAS Energy Trading Energy Other or CombinationSchneider Electric Energy Other or CombinationSMA Solar UK Energy Other or CombinationVattenfall Wind Power Energy Other or Combination Finance/Banking Norges Bank Investment Management BankingAlly Financial Finance/Banking Other or CombinationBMW Group Financial Services Finance/Banking Other or CombinationCapital Group Companies Global Finance/Banking Other or CombinationICAP Finance/Banking Other or Combination 2012 Mercer LLC December14 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Finance/Banking Total System Services Processing Europe Finance/Banking Other or CombinationWestern Union Finance/Banking Other or Combination High-Tech Checkpoint Systems Computer and Electronic ProductsJabil Circuit UK Computer and Electronic ProductsSyfer Technology Computer and Electronic ProductsADVA Optical Networking TelecommunicationsCorning TelecommunicationsTeliaSonera International Carrier UK TelecommunicationsAccenture High-Tech Other or CombinationAsiaInfo-Linkage H.K. Systems UK Branch High-Tech Other or CombinationASM UK Sales High-Tech Other or CombinationBE Aerospace High-Tech Other or CombinationCarl Zeiss High-Tech Other or CombinationGambro Lundia High-Tech Other or CombinationGiesecke & Devrient GB High-Tech Other or CombinationHitachi Europe High-Tech Other or CombinationHR Reward Partner High-Tech Other or CombinationInvensys High-Tech Other or CombinationPall Europe High-Tech Other or CombinationRaytheon UK High-Tech Other or CombinationRenesas Electronics Europe High-Tech Other or CombinationSITA High-Tech Other or CombinationTellabs High-Tech Other or CombinationVaisala High-Tech Other or Combination Insurance Aetna Global Benefits Europe Insurance Health and MedicalZurich Insurance Other or Combination Nondurable (Excluding Consumer Goods) Arch Chemicals ChemicalArch UK Biocides ChemicalBASF ChemicalChemetall ChemicalCP Kelco UK ChemicalElementis ChemicalGivaudan UK ChemicalHickson Chemical Supplies ChemicalHoganas Great Britain ChemicalLanxess ChemicalLubrizol Chemical 2012 Mercer LLC December15 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Nondurable (Excluding Consumer Goods) Monsanto UK ChemicalPerstorp UK ChemicalPraxair Surface Technologies ChemicalReichhold UK ChemicalSolutia UK ChemicalValspar Chemical Retail/Wholesale Trade Boots UK RetailGoodyear Dunlop Tyres UK RetailIKEA RetailPANDORA Jewellery UK RetailParfums Christian Dior RetailPeugeot Citroen Automobiles UK RetailQVC RetailTJX Europe RetailVolvo Car UK RetailVolvo Group RetailWarnaco UK RetailWDFG UK RetailGrundfos Pumps Wholesale DistributionHerbalife Europe Wholesale DistributionMusgrave Retail Partners Wholesale DistributionMusgrave Wholesale Partners Wholesale DistributionNew Balance Athletic Shoes UK Wholesale Distribution Services Hilton Worldwide Hospitality/RestaurantBusiness Connexion Services Other or Combination Other Bristow Group Utilities EnergyESB Energy International Utilities Energy 2012 Mercer LLC December16 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM 3 Background Benefits in the United Kingdom In this section, practices in the areas of retirement, death, disability, medical and maternity benefits provision for employees are summarized. In the United Kingdom, in the event of retirement, death or disability, benefit payments can be cumulated from 2 sources: state benefits and benefits provided by employer. 3.1. State Benefits 3.1.1. Retirement Benefits Eligibility All the UK earners from the age of 16 who are paid more than the earnings threshold, and those who are credited National Insurance (NI) contributions. Normal Retirement Benefit There are two main state retirement benefits as follows: Basic State Pension (BSP) and State Second Pension (S2P). The BSP is a flat-rate benefit. The full BSP from April 2012 is GBP 107.45 per week (GBP 5,587.40 per annum) for a single person or GBP 171.85 per week (GBP 8,936.20 per annum) for a married couple. Individuals reaching State Pension Age (SPA) on or after 6 April 2012 must have at least 30 qualifying years of National Insurance (NI) contributions. S2P is currently earnings related but is moving towards a flat-rate benefit. Benefits are aimed at lower earners, with the pension for a full career (assumed to be 44 years) being assessed as: A flat-rate pension of GBP 3,890 per annum; Plus 10% of earnings between the Lower Earnings Threshold GBP 14,700 and the Upper Accrual Point GBP 40,040 per annum. 2012 Mercer LLC December17 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Organisations with private pension plans that meet certain conditions may contract out of S2P and provide benefits through the company plan in return for reductions in NI contributions. However, the ability to contract out on a money purchase (or protected rights) basis, that is through a money purchase occupational scheme or a personal pension plan has been removed with effect from 6 April 2012. It is still possible to contract out in defined benefit final salary and career average schemes. A non-taxable pension credit is also payable for low-income people over age 60. Employee Contributions No national insurance (NI) contributions are required on earnings below Primary Earnings Threshold (PET: GBP 146 per week for 2012/2013). Twelve percent of weekly earnings are required on earnings between PET and upper earnings limit (UEL: GBP 817 per week for 2012/2013) and 2% of earnings above UEL. Rebates are given if the individual is contracted-out of S2P. Employer Contributions No national insurance (NI) contributions on earnings are required below secondary threshold (GBP 144 per week for 2012/2013). 13.8% of weekly earnings are required on earnings above secondary threshold. There is no upper limit applied. Rebates are given if the individual is contracted-out of S2P. 3.1.2. Death Benefits Eligibility Three bereavement benefits are available on the death of a spouse or civil partner. Entitlement to benefits is based on the deceaseds NI contribution record, not the claimants. Conditions for receiving benefits Benefits cease on remarriage, formation of a civil partnership, or cohabitation. Widowed parents allowance and the bereavement allowance cannot be claimed at the same time. Benefits description Bereavement payment This is a tax-free lump sum of GBP 2,000, payable if the deceased spouse had met the NI contribution conditions (or died as a result of their job) and either was not entitled to a state retirement pension or the widowed partner is under SPA at the date of death. Widowed parents allowance This is a taxable weekly benefit, subject to meeting NI contribution conditions, which includes a basic allowance for the surviving parent (GBP 105.95 per week (2012/2013)), and an allowance for each dependant child and additional pension, if the survivor qualifies. Bereavement allowance This is a taxable weekly benefit payable for 52 weeks after the death, provided the deceased had met the NI contribution conditions or died as a result of an industrial accident or disease. The amount depends on the survivors age at the time of the death, and varies from GBP 105.95 per week for 2012/2013 if 55 years or over, down to GBP 31.79 per week for 2012/2013 at age 45. SERPS is not paid in addition. 2012 Mercer LLC December18 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Guardians allowance This is payable in certain circumstances to a person bringing up a child because one or both their parents have died. From April 2012, the weekly amount is GBP 15.55 per child. 3.1.3. Short-term Disability Benefits Eligibility All employees are eligible. Waiting period Three days of disablement need to pass before benefits begin. Conditions for receiving benefits Statutory sick pay (SSP) is not paid for specific illness or treatment, but to those employees who are incapable of work and who satisfy the conditions for payment. Benefits description SSP is payable to employees by their employers for up to 28 weeks in any period of sickness. It is paid from the fourth day of sickness. The standard rate of SSP for 2012/2013 is GBP 85.85 per week. There are no additions for dependants. For those who do not meet the qualifying conditions for SSP (that is, average salary in excess of the lower earnings limit of GBP 107 per week for 2012/2013 before the sickness), Employment and Support Allowance (ESA) may be paid, also from the fourth day of illness. Employers may be able to recover SSP they pay if they have a high proportion of their workforce sick at any one time. 3.1.4. Long-term Disability Benefits Eligibility All employees are eligible. Waiting period (period of disablement before benefits begin) For those claimants who are eligible to receive SSP, entitlement to the Employment and Support Allowance (ESA) begins after the 28th week of entitlement to SSP. If SSP is not payable, then ESA will be paid from the fourth day of sickness (see Short term disability benefits above). Conditions for receiving benefits Those who cannot work because of ill health or a disability may be able to claim Employment and Support Allowance (ESA). This is a contributions-based benefit paid at a range of rates depending on duration of incapacity and the assessed ability to work. It gives people of working age a replacement income when they cannot work or look for work because of illness or a disability. Benefits description Employment and Support Allowance (ESA) is paid in two stages: The basic ESA will be paid at GBP 71.00 for 2012/2013 (GBP 56.25 if under 25). Potential claimants will undergo a Work Capability Assessment (WCA) which will be carried out within 13 weeks. The medical test is there to establish what work related activities the individual is capable of undertaking. 2012 Mercer LLC December19 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM As a result of this test, claimants will be split into two groups: The Work Related Activity Group (WRAG) These are individuals who are identified as being capable of some form of work related activity and will therefore be able to claim ESA at GBP 99.15 per week for 2012/2013.These individuals will be required to attend a work focused interview through the Pathways to Work scheme. Any individual who does not attend these interviews may have their ESA re-assessed. The Support Group (SG) These individuals have been identified as not being able to undertake any work related activity and will therefore not be expected to attend interviews. They will have an income of at least GBP 105.05 per week for 2012/2013. For those more severe cases where it is deemed, following assessment, that the individual is indeed unable to return to gainful employment the ESA, with support component would be paid unconditionally. 3.1.5. Medical & Dental Benefits Conditions for receiving benefits Residents of EEA (European Economic Area) countries must show a European Health Insurance Card (EHIC) or form S1 from other approved countries, a passport, or evidence of being a national resident: residence permit, identity card, home health or benefits authority document with proof of residency. It should be noted that regardless of residential status or nationality emergency treatment given at primary care practices (a GP) or specifically in an accident and emergency department or a walk-in centre providing services similar to those of a hospital accident and emergency department is free of charge; also treatment for certain communicable conditions (excluding HIV/AIDS), compulsory psychiatric care and family planning are free of charge. In the case of treatment given in an accident and emergency department or walk-in centre, the exemption from charges ceases to apply once the patient is formally admitted as an inpatient (this includes emergency operations and admittance to high dependency units) or registered at an outpatient clinic unless, of course, they meet the eligibility criteria. Benefits description Depending on eligibility criteria, most treatment is free, although patients have to pay part of dental costs and prescriptions themselves. There are exemptions to charges for persons on low income, pregnant women, children and older persons. For complete clarity reference should be made to the Department of Health website. Contributions Employee contributions are included in general taxation and in NI contributions. Employer contributions are included in NI contributions. 3.1.6. Maternity Benefits Statutory maternity pay To qualify for statutory maternity pay (SMP), the person must have been employed by their employer into the qualifying week which is the 15th week before the week the baby is due; employed by the same employer without break for at least 26 weeks into the 15th week before the week the baby is due (part weeks count as full weeks); earning before tax an average GBP 107 (from 6 April 2012) a week. Subject to these, there is no lower age limit. 2012 Mercer LLC December20 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM SMP can start at any time between the 11th week before the week the baby is due and the latest from the day following the birth of the baby. It is payable for a maximum of 39 weeks. Two levels of benefit are payable: 90% of the average weekly earnings of the mother for the first six weeks, followed by GBP 135.45 a week (from 6 April 2012), or a rate equal to 90% of the mothers average weekly earnings, if this 90% is less than GBP 135.45, for the remaining 33 weeks. A further 13 weeks of maternity leave may be taken. This is unpaid unless there is a contractual agreement by the employer to provide pay. Maternity allowance If a mother does not qualify for SMP, she may qualify for maternity allowance (MA). The mother must have been employed and/or self-employed for at least 26 weeks in their test period (66 weeks up to and including the week before the week the baby is due) part weeks count as full weeks; and they earned GBP 30 (from April 2012) a week averaged over any 13 weeks in their test period. Statutory and additional paternity allowances If the mothers partner is working for an employer, the partner may be entitled to two weeks Ordinary Paternity Leave (OPL) and Ordinary Statutory Paternity Pay (OSPP) under the same criteria as SMP. In addition, the mothers partner may qualify for Additional Paternity Leave (APL) and Additional Paternity Pay (APP). APL may be taken by an employee with an employment contract. To qualify for leave, the employee must have been with the employer for at least 26 weeks by the qualifying week which is either: The end of the 15th week before the start of the week when the baby is due; The end of the week they are notified that they are matched with their child (adopting within the UK); or The date the child enters Great Britain for the purposes of adoption (adopting from overseas). For the mothers partner to qualify for APL they must take the time off to care for the child, and the childs mother or adopter must: Have been entitled to one or more of the following Statutory Maternity Leave, Statutory Maternity Pay, Maternity Allowance or Statutory Adoption Leave or Pay; Have returned to work and ceased claiming any relevant pay. For the mothers partner to qualify for Additional Statutory Paternity Pay they must be an employed earner. That is they must work for someone who is liable to pay the employers share of their class one National Insurance contributions. They must also earn at least the lower earnings limit (LEL) (GBP 107 per week for 2012/2013) for National Insurance contributions in force at the end of the qualifying week. The mother or adopter must: Have returned to work; Have stopped claiming any relevant pay, with at least two weeks of unexpired Statutory Pay period remaining. The partner must intend to care for the child during the Additional Statutory Paternity Pay Period. Additional Statutory Paternity Pay is only payable during the mothers 39 week Maternity Allowance, Statutory Maternity or Statutory Adoption Pay period. 2012 Mercer LLC December21 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM 3.2. General Market Practice 3.2.1. Retirement Defined Benefit Plan Eligibility Most plans were originally open to all employees. Some employers may operate separate plans for executives. For open schemes, there is usually a waiting period of 312 months before one becomes eligible to join. A large number of DB schemes, particularly smaller schemes, are now closed to new members. It is estimated that only 20% of open DB schemes remain open to new members. Pensionable earnings About 40% of companies define pensionable pay as base salary only, the rest include some elements of variable pay such as shift allowances, overtime, etc. Some companies operate an offset to pensionable earnings to allow for state benefits. Normal retirement benefits A typical DB plan is contracted out of the state plan Second State Pension (S2P), and provides a pension of two-thirds of final pensionable earnings after 40 years service for example, an accrual rate of 1/60th of final pensionable earnings per year of service. Almost all plans allow part of the pension benefits to be exchanged for a tax-free lump sum, within tax authority limits. Typically, 25% of the value of the members benefits may be commuted as tax-free cash. Employee contributions Employees typically contribute 5%8% towards a 1/60th scheme, reflecting the recent upward trend as a result of the increased cost of benefit provision. Members may make additional voluntary contributions. Employer contributions Employer contributions vary considerably, but around 15%25% of pensionable earnings towards a 1/60th scheme plus additional amounts to rectify any deficit in the scheme. Defined Contribution Plan Eligibility Eligibility varies but unless the employer has an occupational pension scheme, stakeholder legislation requires employers to provide access (and a payroll deduction facility) to a designated stakeholder pension plan, which is a form of personal pension contract. The employee must be able to join no later than three months after joining the company, although the employer is not required to contribute. Employers with fewer than five employees are exempt from stakeholder requirements. The stakeholder legislation will be repealed when auto enrolment comes into force. More generally, there is usually a waiting period for participation in an employer-sponsored pension arrangement. The waiting period can be up to 12 months and the employer will still be exempt from stakeholder requirements. Waiting periods for personal pension plans are generally shorter or do not apply. Most plans are open to all employees. Plan membership must be voluntary. 2012 Mercer LLC December22 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Normal retirement benefits Accumulation of contributions together with investment returns, converted to an annuity using accrued funds at retirement and either paid from the scheme or bought out from an insurance company. Form of payment An employee has the option of taking a lump sum from their accrued fund as a tax-free lump sum. The limit on the lump sum is typically 25% of the fund. The remainder of the fund must be used to provide retirement income. Provided that the individual has at least GBP 20,000 per annum in income from other sources, there are no restrictions on the amount of income that can be withdrawn. Employee contributions Employees typically contribute 2%7% of pensionable earnings. Employer contributions Employers typically contribute 4%12% of pensionable earnings, often age-related. Sometimes a basic rate is available with additional contributions dependent on employee contributions to the scheme. 3.2.2. Death Benefits Eligibility Most members of occupational or group personal pension plans are eligible for lump-sum death benefits as a result of the membership of the pension plan. A significant majority of employers extend this cover to non-members, although this is often at a lower level. Benefits description Pension Practically all final salary plans provide a spouses or civil partners pensions on death-in-service, while around half of DC plans now do so (either as an insured level of pension or a lump-sum payment to be used to purchase a spouses pension). Often dependant childrens pensions are payable as well. Under DB plans, the most common level of spouses or civil partners pension is 50% of the members prospective pension, but other forms are found such as a percentage of the members salary or accrued pension. Upon death in retirement, spouses and civil partners benefits are paid as a continuation of the members pension, commonly at the rate of 50% of the members pension before exchanging it for cash at retirement. Lump sum Lump-sum benefits are provided upon death in service by most pension plans, usually on a salary-related basis. The most common multiples provided in the private sector are three or four times the annual salary. In DC plans, the value of the fund less the cost of the spouses or civil partners pension is also usually returned. Lump-sum benefits are generally not provided in retirement, although a guarantee is often applied to pensions in payment. Employee contributions The cost of death benefits is usually part of the overall cost of the pension plan or, for DC plans, met by the employer in addition to pension contributions. 2012 Mercer LLC December23 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM 3.2.3. Short-term Disability Benefits Waiting period (period of disablement before benefits begin) Most employers pay sickness benefits from the first day of absence, although statutory sick pay is not paid until the fourth day of sickness. Benefits description Employers pay statutory sick pay (SSP) to their employees for up to 28 weeks in any period of sickness. It is paid from the fourth day of sickness. SSP benefits are equal to GBP 85.85 per week for 2012/2013. There are no additions for dependants. For those who do not meet the qualifying conditions for SSP (that is, average salary in excess of the lower earnings limit of GBP 107 per week for 2012/2013 before the sickness), incapacity (disability) benefits are paid, also from the fourth day of illness. Employers may be able to recover SSP they pay if they have a high proportion of their workforce sick at any one time. In many cases, employers top up SSP to 100% of pay for a period, followed by 50% of pay. This typically varies by employer and employee service. 3.2.4. Long-term Disability Benefits Waiting period (period of disablement before benefits begin) Typically the waiting period is 26 weeks of absence. Benefits description The benefit provided is typically between 50% and 75% of the employees pre-disability salary. Benefits may be integrated with state benefits although with the welfare reform legislation, there is likely to be a move away from benefits which are fully integrated with state benefits. Benefit levels vary by industry type. 3.2.5. Medical Benefits Benefits description Medical Supplemental medical plans typically cover private hospital accommodation and NHS pay beds; theatre, surgeons and anaesthetists fees; specialist consultation fees; outpatient visits; inpatient drugs and dressings. Dental Dental plans typically provide reimbursement up to fixed limits although capitation plans, where cover is full refund but the individual has to have all treatment required done prior to joining, are also available but are not so popular in the corporate sector. The recession did not impact the dental market to the same degree as the private medical insurance one and it remains strong irrespective of coming changes to the provision of NHS dental care, which will continue to be on a charge rather than free basis. 2012 Mercer LLC December24 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM Vision Optical plans typically provide reimbursement up to fixed limits, depending on the nature of the treatment. This type of benefit tends to be within a cash plan arrangement for reimbursement of costs rather than a standalone plan. Companies have a statutory obligation to provide eye tests and to subsidise the cost of lenses for all VDU users. Employee contributions Usually the company is contractually obliged to pay the employees premium contribution. If dependants are allowed then they can be on a charge basis. Excess amount (if applicable). Often dental and vision plans are available at full cost to the employee as part of a flexible benefits programme. Premium costs paid by the company are subject to personal income tax as a benefit in kind to the employee. 2012 Mercer LLC December25 of 37SAMPLE2012 Spotlight on Benefits United Kingdom MBM 4 Statistical Results In this section, the statistical results of the survey are provided based on general industry results. Throughout the report, unless otherwise stated, results are presented for professionals and can be representative of broad-based plans offered across the employee population. All statistics are expressed as a percentage of all plans. 4.1. Defined Benefit Plans General 51% of plans offered by organisations are DB plans. 13% of DB plans are open to new entrants. Retirement plan is contracted out of S2P/SERPS in 32% of all plans. Retirement Age In DB plans normal retirement age is typically equal to 65 years. The earliest retirement age at which normal retirement benefits are paid without any reductions is 60. Pensionable Salary The most common elements of compensation added to base salary for the definition of the reference salary are shift payments (17% of plans), overtime payments (12%) and bonuses (11%). In 16% of plans an offset is made from reference salary for the purposes of benefit calculation. 8% of plans apply upper limit on reference salary. DB Post Retirement Death Benefits The vast majority of participating organisations offer benefits available on death after retirement. Some highlights of the results for professionals are given below. Table 1: DB Post Retirement Death Benefits Percentage of All Plans Annuity for Spouse-partner 43%Annuity for Dependent Children 29%Lump sum for Spouse-partner 16%Lump sum for Dependent Children 2% 2012 Mercer LLC December26 of 37SAMPLECopyright 2012 Mercer LLC. All rights reserved.ArgentinaAustraliaAustriaBelgiumBrazilCanadaChileChinaColombiaCzech RepublicDenmarkFinlandFranceGermanyHong KongHungaryIndiaIndonesiaIrelandItalyJapanMalaysiaMexicoNetherlandsNew ZealandNorwayPhilippinesPolandPortugalSaudi ArabiaSingaporeSouth KoreaSpainSwedenSwitzerlandTaiwanThailandTurkeyUnited Arab EmiratesUnited KingdomUnited StatesVenezuelaFor further information, please contact your local Mercer office or visit our website at:www.imercer.comSAMPLESpotlight on Benefits - United KingdomContents1. Overview1.1. About 2012 Benefits Survey Report United Kingdom1.2. If You Have Questions1.3. Confidentiality2. Participant List2.1. Alphabetical List2.2. By Industry3. Background Benefits in the United Kingdom3.1. State Benefits3.1.1. Retirement Benefits3.1.2. Death Benefits3.1.3. Short-term Disability Benefits3.1.4. Long-term Disability Benefits3.1.5. Medical & Dental Benefits3.1.6. Maternity Benefits3.2. General Market Practice3.2.1. Retirement3.2.2. Death Benefits3.2.3. Short-term Disability Benefits3.2.4. Long-term Disability Benefits3.2.5. Medical Benefits4. Statistical Results4.1. Defined Benefit Plans4.2. Defined Contribution Plans4.3. Group Personal Pension4.4. Stakeholder Pension4.5. Life Insurance4.6. Short-term Disability Benefits4.7. Long-term Disability Benefits4.8. Medical Plans4.9. Annual Leave4.10. Maternity4.11. Travel4.12. Company Cars4.13. Other Benefits5. Definitions

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