In today’s competitive job market, attracting and retaining top talent requires more than just offering a competitive salary. Employees increasingly value comprehensive compensation packages that include various non-wage benefits, commonly referred to as fringe benefits. These benefits not only enhance the overall compensation but also contribute significantly to employee satisfaction and loyalty.
What Are Fringe Benefits?
Fringe benefits are additional compensations provided to employees beyond their regular wages or salaries. These can include health insurance, retirement plans, paid time off, and other perks that support employees’ well-being and work-life balance. Such benefits are integral in creating a supportive work environment and are often tailored to meet the diverse needs of the workforce.
Types of Fringe Benefits
Fringe benefits can be categorized into several types, each serving different aspects of an employee’s professional and personal life:
- Health and Wellness Benefits: These include medical, dental, and vision insurance, as well as wellness programs and gym memberships.
- Financial Security Benefits: Retirement plans, life insurance, and disability insurance fall under this category, providing financial stability to employees and their families.
- Work-Life Balance Benefits: Paid time off, flexible working hours, and parental leave help employees maintain a healthy balance between work and personal life.
- Professional Development Benefits: Tuition reimbursement and training programs support employees’ career growth and skill enhancement.
- Other Perks: These may include company cars, employee discounts, and childcare assistance, adding value to the overall compensation package.
Importance of Fringe Benefits
Offering fringe benefits is crucial for several reasons. First and foremost, comprehensive benefits packages significantly enhance an organization’s appeal to prospective employees, making it easier to attract top-tier talent in a competitive job market. Beyond recruitment, these benefits play a vital role in retaining staff, as they contribute to overall job satisfaction and reduce employee turnover.
When individuals feel supported and valued through meaningful perks, their engagement and productivity levels naturally rise, benefiting both performance and morale. Moreover, a well-designed benefits program signals a company’s genuine commitment to its workforce, helping to cultivate a positive, inclusive, and loyalty-driven workplace culture.
Legal Considerations
Employers must navigate various legal requirements when offering fringe benefits. Some benefits, such as workers’ compensation and unemployment insurance, are mandated by law. Others, like health insurance, may be subject to regulations depending on the size of the company and jurisdiction. It’s essential for employers to stay informed about applicable laws to ensure compliance and avoid potential penalties.
In addition to federal mandates, many states have their own laws that govern benefit offerings, including paid family leave, disability insurance, or specific healthcare coverage standards. For example, under the Affordable Care Act (ACA), employers with 50 or more full-time equivalent employees are required to offer health insurance or face potential fines. Misclassifying employees or failing to report taxable benefits properly can also attract scrutiny from the IRS or Department of Labor.
To stay compliant, companies should maintain thorough documentation, regularly audit their benefit programs, and consult with legal or tax professionals when structuring or updating fringe offerings. This proactive approach not only mitigates risk but also fosters a responsible and legally sound employment environment.
Tax Implications
Understanding the tax implications of fringe benefits is vital for both employers and employees. Some benefits are taxable and must be reported as income, while others are tax-exempt. For instance, health insurance premiums paid by the employer are generally not considered taxable income for the employee. On the other hand, certain fringe benefits like bonuses, personal use of a company car, or housing allowances may be fully or partially taxable and must be included in the employee’s gross income for tax purposes.
Employers are responsible for correctly identifying which benefits are subject to federal income tax, Social Security, Medicare, and Federal Unemployment Tax (FUTA). Failure to do so can lead to compliance issues and potential penalties. For example, if an employer incorrectly classifies a taxable fringe benefit as exempt, it can result in underpaid employment taxes and necessitate costly corrections or audits.
In addition to federal requirements, some fringe benefits may also be subject to state and local taxes, which vary depending on the jurisdiction. Tax laws can change frequently, and keeping up with these shifts is essential to avoid errors in payroll processing and year-end reporting. Fringe benefits should be accurately tracked and reflected in W-2 forms issued to employees, ensuring that both parties are aligned with IRS guidelines.
Moreover, employers should clearly communicate the tax implications of specific benefits to their workforce. Transparency helps employees understand the real value of their compensation package and prevents confusion when unexpected withholdings appear on paychecks. Seeking guidance from tax professionals and maintaining up-to-date payroll software can help simplify the complex landscape of fringe benefit taxation.
How to Calculate Fringe Benefits Accurately
In the ever-evolving landscape of employee compensation, the importance of accurately calculating fringe benefits cannot be overstated. These non-wage offerings represent a significant portion of the true cost of employment and play a pivotal role in strategic financial planning, payroll management, and compliance. Understanding how to determine the value of fringe benefits is essential for employers who want to optimize their budgeting and offer equitable compensation packages.
Beyond financial accuracy, calculating fringe benefits allows organizations to evaluate the competitiveness of their offerings in the labor market. When companies can clearly articulate the total value of employment—including both salary and benefits—they are better positioned to attract and retain top talent. Additionally, detailed fringe benefit calculations ensure compliance with tax laws and help prevent costly errors during audits or reporting periods.
Employers must also account for changing benefit costs, such as rising healthcare premiums or evolving retirement contribution models. Regularly reviewing and updating fringe benefit valuations fosters transparency and equips businesses to make informed decisions about workforce investments. This proactive approach strengthens internal accountability and supports a culture that values both fiscal responsibility and employee well-being.
Defining the Scope of Fringe Benefits
Before embarking on the calculations, it is critical to define what qualifies as a fringe benefit within your organization. While certain benefits are standard, such as health insurance or retirement contributions, others can be unique depending on industry or company culture. For example, remote work stipends, wellness incentives, or educational assistance programs all fall under this umbrella.
These benefits may be taxable or non-taxable, depending on federal and state tax regulations. Taxable benefits are typically included in the employee’s gross income and must be reported accordingly. Therefore, understanding the classification of each benefit is a foundational step in the calculation process.
1.Identify All Applicable Fringe Benefits
The first step in calculating fringe benefits is to compile a comprehensive list of all benefits offered to a particular employee. This should include both mandatory and optional offerings. For salaried and hourly workers alike, consider the following categories:
- Health, dental, and vision insurance premiums paid by the employer
- Employer contributions to retirement plans
- Life and disability insurance
- Paid leave (vacation, holidays, sick days)
- Bonuses and incentive pay
- Tuition reimbursement
- Company vehicle usage or mileage reimbursement
- On-site childcare or childcare reimbursement
- Fitness and wellness program subsidies
- Commuter benefits and parking allowances
- Employer-paid payroll taxes (Social Security, Medicare, unemployment insurance)
Each of these items carries a specific cost to the employer, which must be quantified on an annual basis for accurate reporting and budgeting.
2.Determine the Monetary Value of Each Benefit
After identifying the relevant benefits, the next step is to determine their exact cost. Some are straightforward, such as a monthly insurance premium of $500, totaling $6,000 annually. Others may require estimation, particularly if they vary month to month or are usage-dependent, like transportation stipends or performance bonuses.
When calculating variable benefits, use the average cost over a fiscal year to ensure a realistic valuation. For instance, if an employee occasionally receives a quarterly bonus, the total value of these bonuses over the year should be averaged and incorporated into the calculation. Similarly, benefits like wellness reimbursements, travel allowances, or meal stipends can fluctuate, making it essential to base estimates on past data and projected usage. This practice avoids underestimating or overestimating the financial impact of such offerings.
In addition to these perks, employer-paid taxes and mandatory contributions must also be factored into the fringe benefit cost. These often-overlooked components include the employer’s share of Social Security and Medicare taxes, federal and state unemployment insurance, and workers’ compensation insurance. Although not perceived as direct benefits by employees, these expenses significantly contribute to the overall compensation burden on the employer. Ignoring them would present an incomplete picture of the true cost of employment.
Moreover, it’s vital to account for indirect benefits that may not have explicit line-item costs but nonetheless affect an organization’s budget. For example, company-sponsored training and professional development programs, though not tied to a monthly premium, represent an investment in the workforce and should be evaluated accordingly. Assigning a proportional cost to such initiatives, based on total program expenses and participation rates, can yield a more accurate fringe benefit estimate.
Employers should also stay up to date with current market rates and inflationary changes that impact benefit costs. Health insurance premiums, for instance, can rise year over year, while pension contributions may be affected by legislative updates. Conducting regular audits and collaborating closely with human resources and finance departments ensures that benefit valuations remain precise, current, and aligned with both regulatory obligations and business goals. Ultimately, careful attention to every component of compensation allows companies to make informed strategic decisions and maintain fiscal discipline while offering competitive employment packages.
3.Sum the Annual Value of All Fringe Benefits
Once you have established the value of each individual benefit, the next logical step is to sum them. This total represents the gross annual cost of the fringe benefits provided to an employee. For instance, an employee who receives $6,000 in insurance, $4,500 in retirement contributions, $2,000 in bonuses, and $3,500 in paid leave would have a total benefit cost of $16,000.
Employers should maintain detailed records of these calculations for transparency, internal audits, and compliance with tax regulations. Documentation also allows for easy recalibration if changes to the benefits package occur mid-year.
Understanding the Fringe Benefit Rate
The fringe benefit rate is a critical metric that expresses the cost of benefits as a percentage of an employee’s base salary or wages. It allows businesses to gauge the full cost of employing a worker and compare compensation structures across different roles or departments.
The formula is:
Fringe Benefit Rate (%) = (Total Annual Fringe Benefits / Annual Salary or Wages) x 100
This percentage is particularly useful for budgeting, cost analysis, and setting equitable salary bands across an organization.
Incorporating Fringe Benefit Calculations into Payroll Systems
Once fringe benefit rates are calculated, they should be integrated into the payroll and accounting systems. This ensures that the true cost of each employee is reflected in financial reports and that tax withholdings are accurately managed. Including fringe benefit rates in accounting processes enhances the clarity of operational costs and supports better forecasting, allowing businesses to plan for both short-term and long-term financial commitments.
Employers may choose to record these rates monthly or quarterly, depending on the complexity of their payroll system and the variability of the benefits offered. Monthly updates provide a more granular look at benefit fluctuations, particularly for businesses that offer performance bonuses, fluctuating stipends, or commission-based compensation. Quarterly assessments may suit companies with more stable benefits or those looking to streamline reporting procedures without sacrificing accuracy.
Regular updates help identify changes in benefit utilization or cost, allowing businesses to adjust budgets or renegotiate provider contracts proactively. For instance, a sharp rise in healthcare premiums or retirement fund contributions may prompt a review of benefit vendors or internal policies. When these changes are promptly integrated into the accounting framework, employers can respond effectively to cost increases and maintain financial stability.
Moreover, integrating fringe benefit data into financial systems enhances compliance with tax regulations and ensures that all mandatory reporting is handled correctly. Employers can automate fringe benefit tracking, categorize them for tax purposes, and generate reports for auditors or regulatory bodies with minimal manual intervention. Ultimately, this process transforms fringe benefit rates from isolated data points into actionable financial insights, strengthening both compensation strategy and fiscal responsibility.
Role of Fringe Benefits in Cost Allocation
In many organizations, especially those engaged in government contracting or grant-funded projects, fringe benefits must be allocated appropriately to various cost centers. This ensures compliance with cost accounting standards and promotes financial integrity. Accurate allocation is not only a requirement for meeting federal or state auditing standards but also a best practice that enhances transparency in how funds are used.
A standardized fringe benefit rate aids in allocating personnel costs accurately across departments or projects, helping to avoid misstatements in budgets and ensuring that indirect costs are consistently and fairly distributed. When fringe benefits are allocated systematically, it becomes easier to justify expenditures during audits and maintain eligibility for continued funding. Organizations can clearly demonstrate how every dollar of compensation is used, whether through salaries or associated benefits.
Furthermore, such allocations support internal benchmarking, allowing leadership to compare costs across departments or projects and make informed decisions about hiring, funding distribution, and resource optimization. In this way, a standardized fringe benefit rate becomes a vital tool not just for compliance, but for financial forecasting and strategic planning at large.
Pitfalls to Avoid When Calculating Fringe Benefits
While the calculation process for fringe benefits is relatively straightforward, employers must be vigilant to avoid several common errors that can compromise accuracy and compliance. One frequent oversight is omitting hidden costs, such as employer-paid taxes or indirect expenses like employee training, which can lead to significant underreporting. Another common mistake involves using inconsistent or outdated valuation figures without proper verification, potentially skewing the final results.
Additionally, failing to distinguish between taxable and non-taxable benefits can cause regulatory compliance issues, particularly during tax reporting. Poor documentation also poses a risk, as insufficient records hinder the ability to verify calculations during audits or financial reviews. Preventing these errors requires meticulous attention to detail, regular updates and reviews of benefit costs, and close collaboration between human resources and finance departments.
Benefits of Accurate Fringe Benefit Calculations
There are tangible advantages to mastering the art of fringe benefit calculation that extend beyond mere number-crunching. One of the primary benefits is enhanced budgeting, as understanding the complete cost of employment enables more accurate and strategic financial planning. By factoring in not just salaries, but the full range of benefits—healthcare, retirement contributions, insurance, paid leave, and even miscellaneous perks—employers can build comprehensive budgets that reflect true workforce expenses. This prevents financial shortfalls, facilitates long-term planning, and aligns personnel costs with organizational goals.
It also promotes transparent compensation, allowing employees to appreciate the full value of their earnings beyond base pay. Many employees overlook the worth of their benefits unless they are clearly communicated. When organizations present fringe benefits as a part of total compensation statements, it elevates employee satisfaction and reinforces the perception that the company values its people. This transparency can play a critical role in improving morale and retention, especially in competitive job markets where benefits can be a deciding factor between employment offers.
Moreover, precise fringe benefit reporting ensures regulatory compliance, reducing the risk of penalties or complications during tax audits or labor inspections. Government regulations often require clear documentation of employer-provided benefits, particularly when some are taxable while others are not. Meticulous calculation and categorization help organizations remain in good standing with tax authorities, avoiding costly fines and reputational damage. For companies operating across multiple jurisdictions, where rules may vary, proper benefit tracking is essential to maintain compliance with differing federal, state, or local standards.
Finally, having a realistic grasp of total compensation costs supports strategic hiring decisions, helping employers set appropriate salary benchmarks and manage expectations effectively throughout the recruitment process. When a company knows the exact cost of an employee—including both wage and benefits—it can better assess affordability before extending offers. It also aids in crafting compelling job descriptions that highlight total rewards rather than just base salary, making roles more attractive to top-tier candidates.
Additionally, understanding fringe benefits allows HR teams to design packages tailored to the needs of their workforce, whether that means flexible working arrangements, wellness stipends, or educational reimbursements, further distinguishing the company as a desirable place to work. In sum, mastering fringe benefit calculation is not merely an accounting exercise—it is a strategic necessity that enhances fiscal discipline, compliance, and talent management.
Understanding Taxability and Legal Implications of Fringe Benefits
Fringe benefits can be a valuable tool for businesses looking to enhance their compensation packages, boost employee morale, and gain a competitive advantage in attracting top talent. However, employers must also consider the legal and tax implications that accompany these non-wage perks.
From compliance with federal and state regulations to navigating the complexities of taxable versus non-taxable benefits, understanding how fringe benefits are regulated is crucial for maintaining legal integrity and avoiding costly mistakes. This article explores the taxability of fringe benefits, the relevant legal frameworks, and practical tips for ensuring compliance in business operations.
Defining Taxable vs. Non-Taxable Fringe Benefits
The Internal Revenue Service (IRS) distinguishes between fringe benefits that are subject to taxation and those that are exempt. Taxable fringe benefits are generally considered part of an employee’s compensation and are therefore subject to federal income tax, Social Security, and Medicare withholding. Examples include personal use of a company vehicle, cash bonuses, and gym memberships not related to health plans.
Conversely, non-taxable fringe benefits are excluded from gross income and are not subject to withholding taxes. These include health insurance, contributions to qualified retirement plans, educational assistance up to a certain limit, and group term life insurance up to $50,000. Proper classification of each benefit is critical, as misreporting can lead to compliance issues and financial penalties.
Employers must carefully review the benefits they offer and determine whether they fall under the taxable or non-taxable category. The distinction often lies in the purpose and extent of the benefit. For example, meals provided on business premises for the employer’s convenience may be non-taxable, while meals provided for general morale-boosting purposes may not qualify for exemption.
IRS Reporting Requirements and Withholding Obligations
Once taxable fringe benefits are identified, employers are required to include the fair market value (FMV) of these benefits in the employee’s gross income. This amount should be reported on the employee’s Form W-2 in the appropriate boxes. Depending on the benefit, employers may choose to include the value in regular pay periods or in a lump sum at year-end.
Taxable fringe benefits are subject to the same federal tax withholding rules as regular wages. This means that employers must withhold federal income tax, Social Security, and Medicare taxes. In addition, fringe benefits are also subject to Federal Unemployment Tax Act (FUTA) and may be subject to state and local taxes depending on jurisdiction.
One common method for withholding fringe benefits is to treat them as supplemental wages. The IRS allows employers to use a flat withholding rate for supplemental wages, which simplifies the process for benefits such as year-end bonuses or personal use of a company vehicle. However, the employer must still calculate Social Security and Medicare taxes based on the FMV of the benefit.
Navigating Legal Frameworks Governing Fringe Benefits
Fringe benefits are governed by a variety of federal and state laws, each with its own set of requirements and regulations. At the federal level, the key statutes include the Internal Revenue Code (IRC), the Employee Retirement Income Security Act (ERISA), and the Affordable Care Act (ACA). Employers must also be aware of applicable Department of Labor (DOL) rules and state-specific regulations.
ERISA, for instance, sets minimum standards for most voluntarily established pension and health plans in the private industry. Employers offering retirement or health insurance benefits must ensure that their plans comply with ERISA’s fiduciary responsibilities, reporting requirements, and employee protections. The ACA mandates that employers with a certain number of employees provide health insurance that meets minimum essential coverage standards.
In addition to federal laws, employers must consider state employment laws that may impose additional obligations or restrictions. For example, some states require employers to offer commuter benefits, while others have stricter rules regarding paid sick leave or disability insurance. Failing to adhere to these laws can result in fines, legal actions, or audits.
Common Compliance Challenges for Employers
Managing fringe benefits comes with a range of compliance challenges, particularly for small and mid-sized businesses that may not have in-house legal or HR teams. One of the most common issues is failing to properly value or report taxable benefits. For example, assigning an arbitrary or outdated value to a company car can lead to underreporting income and underpaying taxes.
Another challenge lies in recordkeeping. Employers must maintain accurate and comprehensive documentation of all benefits provided, including the rationale for classification as taxable or non-taxable, supporting calculations, and employee communications. In the event of an audit, detailed records can provide essential evidence of compliance.
Employee misclassification can also pose problems. Independent contractors, temporary workers, and part-time staff may or may not be eligible for certain fringe benefits depending on company policy and legal definitions. Misclassifying workers as independent contractors to avoid offering benefits can result in significant penalties if discovered by the IRS or DOL.
Best Practices for Ensuring Compliance
To avoid compliance pitfalls, employers should adopt a proactive approach to fringe benefit management. Here are some best practices that can help businesses remain compliant:
- Conduct Regular Benefit Audits: Periodic internal reviews of benefit offerings can help identify any discrepancies or misclassifications. Audits should assess the fair market value of taxable benefits, review reporting accuracy, and confirm compliance with all applicable laws.
- Consult Tax Professionals: Given the complexity of fringe benefit tax regulations, working with a certified public accountant (CPA) or tax attorney can ensure that your business remains in good standing with the IRS and other authorities.
- Maintain Clear Documentation: Keeping detailed records of all fringe benefits, including cost breakdowns, valuation methods, and employee eligibility, can protect employers during audits and legal inquiries.
- Update Policies as Regulations Change: Tax laws and employment regulations are subject to change. Employers should stay informed of updates and revise their benefits policies accordingly to reflect new legal requirements.
- Train HR and Payroll Staff: Ensuring that staff responsible for payroll and benefits administration are well-trained on current regulations helps reduce the likelihood of errors and fosters a culture of compliance.
Legal Risks and Consequences of Non-Compliance
Failing to comply with fringe benefit laws and tax obligations can lead to a host of legal and financial consequences. These may include back taxes, interest, and penalties assessed by the IRS for underreporting income or failing to withhold appropriate amounts. Additionally, employees may file lawsuits if they believe they were denied benefits unlawfully or were misclassified.
In more severe cases, non-compliance can trigger audits, government investigations, and reputational damage. For example, misreporting benefits or failing to provide mandated health coverage could result in fines under the ACA or disqualification of retirement plans under ERISA.
Even well-intentioned employers can face penalties if they lack the necessary knowledge or systems to track benefits accurately. As such, due diligence and ongoing education are essential to avoiding legal pitfalls.
Role of Technology in Compliance Management
In an era where businesses are increasingly digitizing operations, technology plays a pivotal role in managing fringe benefit compliance. Digital tools can streamline benefits administration, automate tax reporting, and generate detailed audit trails. These platforms can also flag inconsistencies, send compliance alerts, and centralize employee benefit records for easy access.
The evolution of cloud-based payroll and HR platforms has revolutionized how organizations approach fringe benefit tracking and compliance. These systems can integrate seamlessly with accounting software, ensuring that all fringe benefit costs—such as employer-paid insurance, retirement contributions, wellness programs, and transportation stipends—are consistently recorded and accurately reflected in general ledger accounts. For employers with remote or geographically dispersed teams, cloud-based tools offer the additional advantage of centralized control, allowing HR professionals and finance teams to manage compliance uniformly across all locations.
One of the most powerful advantages of using digital tools is automation. Rather than relying on manual spreadsheets, which are prone to errors and inconsistencies, automated systems calculate fringe benefit rates dynamically. They can update rates in real time when changes in employee status occur—such as a promotion, shift to part-time, or enrollment in new benefit programs. This not only reduces administrative burden but also ensures that financial reporting and tax documentation remain up to date, accurate, and audit-ready.
Additionally, many modern platforms offer customizable dashboards and reporting functions. Employers can view real-time data on total compensation costs, drill down into specific benefit categories, and export compliance reports as needed. Such granular visibility allows for faster decision-making and better budget forecasting, especially when preparing for audits, applying for government grants, or responding to regulatory inquiries.
Technology also enhances transparency for employees. Many platforms include employee self-service portals where individuals can view their benefits, understand the monetary value assigned to each, and make informed decisions during open enrollment or job changes. By empowering employees with this information, companies foster trust and encourage better utilization of available benefits, ultimately improving overall satisfaction and retention.
For small and medium-sized businesses, adopting technology for fringe benefit compliance doesn’t necessarily require a large investment. A wide array of scalable solutions exists—ranging from basic payroll tools with add-on benefits modules to comprehensive HR suites with advanced compliance features. Choosing a solution that aligns with organizational needs, growth goals, and regulatory obligations can significantly streamline operations while ensuring compliance remains airtight.
Leveraging technology is no longer optional—it is essential for efficient, accurate, and compliant fringe benefit management in today’s digital workplace.
Balanced Approach to Fringe Benefit Compliance
Fringe benefits, when administered properly, can be a strategic asset in any business. They improve employee satisfaction, strengthen employer branding, and contribute to a more motivated workforce. However, these advantages come with legal and tax responsibilities that cannot be overlooked.
Understanding the distinction between taxable and non-taxable benefits, adhering to federal and state regulations, and adopting sound administrative practices are key to ensuring legal compliance. By implementing internal audits, consulting professionals, training staff, and leveraging technology, employers can effectively navigate the complex terrain of fringe benefit regulation.
Ultimately, a balanced approach that combines thoughtful benefit design with diligent compliance management empowers businesses to offer meaningful perks while safeguarding themselves from regulatory risk. This proactive strategy not only protects the company but also demonstrates a commitment to transparency, fairness, and employee well-being.
Conclusion
In today’s dynamic employment landscape, fringe benefits have emerged not merely as ancillary perks but as a cornerstone of talent acquisition, workforce retention, and comprehensive compensation strategy. We’ve unpacked the nuances of fringe benefits—from their definitions and categories to precise calculation methods and real-world application across different employment scenarios.
By delving into the mechanics of computing fringe benefit values and determining accurate fringe benefit rates, employers gain a sharper lens through which to assess the true cost of employment. This not only ensures compliance with regulatory bodies but also supports clearer budgeting, stronger workforce planning, and more attractive offers for potential hires. For employees, understanding these benefits fosters transparency and allows for more informed career decisions, especially when comparing offers or negotiating roles.
We’ve also explored how these benefits function across industries and employment types, underscoring their variability and the importance of tailored implementation. Whether it’s health insurance, paid time off, retirement plan contributions, or non-cash perks like child care assistance and tuition reimbursement, each benefit reflects a company’s investment in its people—and ultimately, its own sustainability.
In essence, fringe benefits should not be viewed as administrative obligations but as strategic tools. When managed with intention and clarity, they enhance organizational culture, elevate employee morale, and build long-term loyalty. As competition for top-tier talent intensifies and workforce expectations evolve, businesses that master the art of calculating and optimizing fringe benefits will be best positioned to lead with purpose and precision.