Home > Our concept > Flexible vs Traditional benefits

Benefits provided to employees by an employer in a traditional benefits plan are pre-set. Such plans usually provide standardised benefits such as a group medical plan, group life insurance and, possibly, statutory benefits.

In contrast, a flexible benefits plan allows employees to choose the benefits they receive from within a range of health, wealth and lifestyle options.

Employees are able to fund these choices through options that are defined by their employer, for example:

empower’s consultants work with each employer to create an optimal customised benefits solution. Working on behalf of the employer, empower then sources each benefit option from providers for the best price and terms.

Here is how traditional and flexible benefits plans work.

Traditional benefits plan

Standard total compensation under a traditional benefits plan consists of: • Basic salary • Group Benefits - Benefit A and Benefit B (e.g. Group Medical Plan and Group Life Insurance)

Flexible benefits plan (trading benefits)

A flexible benefits plan that allows employees to trade some of their existing benefits and buy others that suit their needs while receiving the same amount of basic salary. For example, • Keep the same coverage level on Benefit A • Trade down the coverage level on Benefit B • Use the flex fund created from trading down Benefit B to buy extra Benefit C (e.g. Gym Membership)

Flexible benefits plan (with extra flex fund provided by the employer)

A flexible benefits plan that includes an extra flex fund provided by the employer. For example, • Keep the same coverage level on Benefit A • Trade down the coverage level on Benefit B • Use the flex fund created from trading down Benefit B to buy extra Benefit C • Use the extra flex fund provided by the employer to buy Benefit D (e.g. Dependents Medical Cover)

Flexible benefits plan (topping-up the flex fund directly from salary)

A flexible benefits plan that allows employees to buy additional benefits by topping–up their flex fund directly from salary. For example, • Keep the same coverage level on Benefit A • Trade down the coverage level on Benefit B • Use the flex fund created from trading down Benefit B to buy extra Benefit C • Sacrificing some of their salary to buy Benefit D