Ford Introduces Flexible Benefits Plan for Salaried Employees

Strategic Insights -

Ford Motor Company has announced plans to implement a flexible benefits program for its U.S. salaried employees, offering a range of choices to meet their changing needs and circumstances. The program, set to launch on June 1, 1995, aims to provide employees with more control over their benefits while also helping the company manage its costs. Ford has conducted extensive research and gathered input from employees to design a program that will offer a competitive and attractive total compensation package.

Key Takeaways:

  • Ford's flexible benefits plan will allow employees to design their own benefits package from a broad selection of options, including health care, dental, and life insurance.
  • The plan will be funded through a combination of fixed credits and a "Bonus Flexdollars" system, which will fluctuate based on company performance.
  • Employees will be able to choose from a range of health care options, including a new Ford Medical Plan with higher deductibles but no monthly payment.
  • The company will provide a maximum of $600 in Bonus Flexdollars per year, which can be used to purchase benefits or taken in cash.
  • Over 30% of Ford's salaried employees already pay a portion of their monthly medical premiums, with some employees paying up to $45 per month for family coverage.
  • The plan will be launched on June 1, 1995, and employees will have time to learn about the new benefits approach before enrolling.

Statistics:

  • 45,000 U.S. automotive salaried employees will be eligible for the flexible benefits program.
  • Ford conducted employee focus groups and surveyed all eligible employees in 1994 to gather input and ideas for the program.
  • The company has benchmarked other companies that use flexible benefits to identify best practices.
  • Ford's Savings and Stock Investment Program (SSIP) was rated as one of the most valuable benefits offered by the company in a 1994 salaried benefits survey.
  • Employees will be able to invest in six additional funds from Fidelity, with access to more than 50 other funds offered through Fidelity BrokerageLink.
  • Ford has allocated 5% of base salaries to provide for merit salary increases in 1995.

Sources:

  • Ford Motor Company press release, January 9, 1995
  • Ford Motor Company, "Savings and Stock Investment Program" brochure
  • "Ford to Introduce Flexible Benefits Program", Automotive News, January 9, 1995