When discussing lump sum policy, the core/flex policy is an attempt to provide greater flexibility and a better employee relocation experience for the employee while allowing the employer to meet global mobility objectives and contain costs. A perennial complaint of transferring employees is that relocation policies include benefits the employee neither wants nor needs, but do not include alternative benefits that better meet the employees’ needs.

These benefits go unused, which saves the employer money but can leave the employees feeling like their needs have gone unmet. Occasionally, relocating employees ask to trade undesired benefits for ones that are more relevant (e.g. an extension of temporary housing instead of spouse counseling). Most employers view these request as exceptions to policy and deny them.

With a core/flex program, companies often choose to retain a tiered methodology, with tiers typically differentiated by job grade or homeowner/renter status. There is also a trend to have a dedicated “executive” tier for higher-level employees. Within each policy tier, there are specifically defined (core) benefits. Companies determine which core benefits to include by analyzing historical benefits usage data. The core benefits do not have a monetary cap or limit, but employees must use them exactly as defined in the policy.

Examples of typical core benefits (domestic relocation):

Homeowner Policy Tier:

  • Homesale – BVO or GBO
  • Household Goods Shipment
  • Household Goods Storage
  • Shipment of One Car
  • Final Trip

Renter Policy Tier:

  • Rental Assistance (1 day rental tour and/or finder’s fees)
  • Household Goods Shipment
  • Shipment of One Car
  • Final Trip

The remaining benefits in each tier are flexible. Employees can select whichever flexible benefits in the tier meet their needs best, up to a specified dollar cap. The company determines these caps by analyzing historical data on benefits usage and cost. Depending upon the size of the program and the types of flexible benefits offered, an example of a monetary cap for a renter tier might be $15,000 and for a homeowner tier, $30,000. The main differentiator for an executive tier is often the amount allowed for flexible benefit usage, and occasionally, the addition of one or two benefits not included in the other tiers. For example, the company might set a monetary cap of $35,000 on flexible benefits for an executive tier, with the addition of a loss on sale benefit not included in other tiers.

Examples of typical flexible (flex) benefits for both Homeowner and Renter Tiers:

  • Homefinding Trip (one or two people for a specified number of days, including transportation, lodging and meals)
  • Temporary housing (as well as additional temporary housing time needed)
  • Transportation costs for return trips home during the temporary housing period
  • Rental car (at destination location)
  • Shipment of second or third automobile
  • Household goods storage (or additional storage time)
  • Pet transportation
  • Duplicate housing costs (based on the lesser costs of the two homes)
  • Loss on sale (generally offered at the executive level only)
  • Lease cancellation fees (two month rent cap)
  • Rental security deposit
  • New home purchase closing costs (typically up to a capped monetary amount)
  • General home inspection
  • Re-employment assistance for spouse/partner
  • Miscellaneous allowance (can be limited to $500 increments not to exceed a specified, capped amount)


The core/flex model can include in-house or third party employee relocation counseling to help employees understand this more complex program and to select the benefits that meet their needs. Although not perfect, this program does give the employee more flexibility while still helping the company to control costs. Companies also have the ability to track the data and keep the flex amounts and core benefit offerings up to date from year to year.


The main disadvantage to the core/flex program is the added administrative effort it requires. Companies must set and manage budgets, audit expenses and ensure that all managers who use the program thoroughly understand it.

Management Tips for Lump Sum Policy

For companies that opt for a core/flex program, a third-party provider can assume much of the added administrative burden at no added charge to the company.

To help you understand the complexities of  a lump sum policy, download the white paper, “Lump Sum Policies Best Practices” to learn about the advantages and disadvantages of each type of lump sum policy; how each type of lump sum program works; and which type of policy is the best fit for your employee relocation program.

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