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Lump Sum Allowances - One Size Does Not Fit All

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3 Many companies provide a fixed lump sum for their transferees' home finding, temporary living and final move expenses. This fixed amount is provided to all transferees as a pre-determined amount based upon policy level and/or distance. There are downsides to providing a distance-based lump sum. Namely, the transferee may get too much or too li le when geography and family size are not factored in. For example, a single transferee moving from San Diego to Los Angeles will not have the same needs as a transferee moving with a family of four. If the lump sum was based on distance alone, the transferee with a family is unlikely to have a jus fiable amount for their expenses. On the other hand, the single transferee may have excess funds. Addi onally, a distance-based allowance does not consider the actual geographical cost differences. This may result in the transferee receiving insufficient or surplus funds. For example, let's say a company has a transferee with a family of four moving from Boston to Orlando. Should they receive the same amount as the family that is moving from Orlando to Boston? The distance is the same, but the costs are very different. For the family moving to Boston, the cost for lodging alone can be double the cost in Orlando. Providing a fixed lump sum based on distance may lead to addi onal excep on requests for the family moving to Boston. It can also cause conflict between the organiza on and its transferees, poten ally resul ng in a failed reloca on. If a fixed lump sum isn't the answer, what is a be er alterna ve? Let's explore a transferee-specific calculated lump sum program that is also geographically sensi ve. THE FLAWS OF THE FIXED LUMP SUM THERE ARE DOWNSIDES to providing a distance based lump sum

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