4 core/flex relocation policies that will make your life easier
Post on 19-Jul-2015
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we’re going to show you how to build core/flex relocation policies for 4 different types of
transferees:
Core/flex policies have been around for a while, but it’s the implementation of them that’s becoming much more prevalent
what’s the new cost of living? is there a gross-up?
what benefits do they need? what about an expense allowance?
Creating relocation policies is time consuming, even before all the
exceptions start coming into play
complex
It does this by allowing transferees to pull in the pieces of a relocation
policy that they need, and then build upon them as those needs
become more
pet assistance
spousal support
temporary living
homefinding trip
in-transit storage
It’s a list of anything from pet assistance, to spousal support, to temporary living, to homefinding trips, to
storage—the options endless. A company would have a detailed list of benefits (along with what coverage is included in those benefits) and then
based on the level of the transferee, allow them to choose more or fewer options.
Note: These benefits aren’t paid to
the transferee, but rather something they use through
the tool being used to facilitate the relocation
(such as a relocation management software)
Get it?
Money goes from the employer, through the
RMS, and is used on behalf of the transferee
This person
offer a set numerical amount
of flex benefits (up to 3 benefits)
SET A MAX dollar amount
of flex benefits (up to $2,500)
numerical amount
it’s cut and dry
the transferee gets 3 flex benefits to choose from,
and that’s it.
numerical amount
benefits are not equal
one transferee’s 3 benefits might not equate to another
transferee’s 3 benefits.
homefinding trip Expenses related to the homefinding trip
for you and one other adult member
The trip must not exceed 3 days/2 nights
Round trip transportation
Reasonable lodging – arranged through the company’s service provider
A per diem for meals, not to exceed $55
per day per person
dollar amount
requires more monitoring
have to be much more on top of making sure that the transferee is staying within their budget.
Expenses related to the homefinding trip for 1 person
Trip duration of 2 days/1 night
Round trip transportation
Reasonable lodging – arranged through the
company’s service provider
A per diem for meals of $45 per day
homefinding trip
“If you are renting a home or apartment, you should understand the conditions for
terminating your lease. You should obtain a copy of the lease to review your options and understand what the transfer clause is that
you would have to break. You may be required to pay a lease cancellation fee, which
is reimbursable for up to one month’s rent. You should provide the employer a copy of
the lease agreement in regards to cancelling, along with proof of payment.”
it’s the responsibility to educate employees on tax ramifications associated with relocation
non-deductible lump sum/mea temporary living car rental return trips etc.
it’s the responsibility to educate employees on tax ramifications associated with relocation
non-deductible lump sum/mea temporary living car rental return trips etc.
tax-deductible shipment of household goods, vehicles, and pets first 30 days of in-transit storage the final move
Acme relocation policy Lump sum = $12,000
With lump sum With core/flex
• $12,000 becomes $7,800 (Assuming a 35% tax)
• Must gross-up lump sum
to $16,200 for transferee to receive $12,000
Loss of $4,200
• Lump sum is used for less, so amount can be reduced
• To provide a $3,000 lump sum, employer only has to gross-up to $4,050
Loss of $1,050
the final move includes costs incurred between the last night in current
location to first night in new location
Requirements
- route taken must be the most direct - must be driving 350 miles per day - if distance is less than 500 miles,
employee must drive - if distance is over 500 miles, flight
must be purchased 2 weeks in advance
- all mileage is reimbursed at current mileage rate provided by the IRS
sum of money for untracked expenses
sum of money for tracked, relocation-related expenses
=MEA
complete control, providing the most structure
=lump sum
=flex benefit
Renter
- lease cancellation
- lease acquisition
- finder’s fees
- guided tours
or: flex benefits for renting-related costs for up to $1,000
Homeowner
- closing costs
- home inspection
- loss-on-sale
- loan fees or: flex benefits for homesale-related costs for up to $5,000
lifestyle transition assistance
what’s included
- Career assessment and coaching - Resume preparation and production - Cover & reference letters preparation - Interview training and networking strategies - Internet job postings and community research
what it is
Lifestyle transition assistance is available to you and your family during and after your relocation. You’ll be paired with a consultant to assist you, along with a career relocation service that will give help to anyone facing a career or job change.
this way, you can be sure you are
spending your money in the most useful way possible for your
transferees
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