THE WONDER OF WORLDWIDE ERC ® PRESENTED BY: MARTHA BENNETT, DIRECTOR OF TRAINING, ARIZONA RELOCATION ALLIANCE

2016 Best of the West Relocation Summit The Far Past 1950 – 1972 Employers EEREAC The Years 1972 – Present Employers Worldwide ERC’s Contributions to the Industry The Present Martha’s Story 2015 US Transfer Volume and Cost Survey TODAY’S LINE UP

2016 Best of the West Relocation Summit Employers How they relocated employee Employee Relocation Real Estate Advisory Council (EEREAC) How they assisted employers with home sale THE FAR PAST 1950 – 1972

2016 Best of the West Relocation Summit Employers What Rev Rul means Worldwide ERC’s Contributions to the Industry 11 Key Elements Fallout from Amdhal v. Commissioner decision Standardization of reporting Certifications THE YEARS 1972 – PRESENT

2016 Best of the West Relocation Summit How Rev Rul works Assume sales price of $360,000 Closing costs at 8.5% = $30,600 Employee taxed at 25% tax bracket = $7,650  Reimbursed by employer Gross up paid to employee by employer = $2,550 IRS collects $10,200 in taxable benefits Two separate sales means no closing costs on 1 st transaction  Employer saves $10,200 in tax and gross up costs  Employee saves $40,800 in taxable income Employer and Employee? IRS? THE YEARS 1972 – PRESENT (CONTINUED)

2016 Best of the West Relocation Summit Worldwide ERC Contributions to the Industry 11 Key Elements  Published by Worldwide ERC in 1985  Established criteria for ensuring two separate sales ensuring benefits found in Rev Rul Fallout from Amdhal v. Commissioner decision  IRS Audits increase  Recommendation to refrain from using “Deed to Blank” THE YEARS 1972 – PRESENT (CONTINUED)

2016 Best of the West Relocation Summit Certifications Certified Relocation Professional (CRP)  Initiated 1990 Global Mobility Specialist (GMS)  Initiated 2003 GMS-T: Strategic Talent Mobility  Initiated 2014 THE YEARS 1972 – PRESENT (CONTINUED)

2016 Best of the West Relocation Summit Standardization of Reporting Tax and legal information Relocation Appraisal Guide  7 revisions since 1985 Relocation Property Assessment  2 revisions since the 1980’s Broker’s Market Analysis & Marketing Guide  3 revisions since 1989 Homesale Program Terminology  2 revisions Multiple revisions of research reports  New Hire Survey and Relocation Assistance: Transferred Employees THE YEARS 1972 – PRESENT (CONTINUED)

2016 Best of the West Relocation Summit Martha’s Story How I Use Worldwide ERC  Mobility Magazine  The Numbers  Pathways: How I Fell into Mobility  Feature Articles Tax and Legal Information CRP Credits THE PRESENT

2016 Best of the West Relocation Summit Examining Trends in... Relocation volume, mobility policy and practice, and costs associated with mobility in the US Mobility Activity Transfer volumes of new hires and current employees up from a low in 2009 with growth increasing yearly Time Allowed to Accept Transfer & Report to New Job 13 days to accept the offer 33 days to report to new job 2015 US TRANSFER VOLUME AND COST SURVEY

2016 Best of the West Relocation Summit Renting vs. Buying Renting continues to be a common practice Millennials prefer to rent Homeownership rates dropped to 63.4%, lowest since 1967 Vacancy rates dropped to lowest levels since early 1990’s 54% of companies see increase in home owning mobile employees choosing to rent in new location Reluctance to Relocate Continues to decline; tied to improving housing market; drop in negative equity situations 2015 major reason is family resistance to move 2015 US TVC SURVEY (CONTINUED)

2016 Best of the West Relocation Summit Relocation Costs Homeowner Transferees  Current employees reached a peak in 2011 of $97,166  Dropped to $85,673 in 2014  New hire employees stayed level since 2012 at $71,000 Renter Transferees  Current and New Hire increased 8–9% due to tightening of rental market and rents rising 5 component costs rose by 4% or more 2013–2014  Purchase closing costs, enroute, bonuses/incentives for mobile employee generated home sales, homefinding trips and spouse employment expenses 2015 US TVC SURVEY (CONTINUED)

2016 Best of the West Relocation Summit Relocation Costs – Continued Household Goods costs remained the same 2013– component costs decreased  Loss-on-sale assistance (lowest since 2007), temporary living at new location, duplicate housing, home sale assistance, miscellaneous expense allowance and federal tax liability Home Purchase Programs Companies using a home purchase plan as their primary form of assistance – AV, Regular, BVO or assigned sale  2/3 use RMCs  1/4 use corporate based or inhouse plans  10% use direct reimbursement 2015 US TVC SURVEY (CONTINUED)

2016 Best of the West Relocation Summit Home Purchase Programs – Continued Average purchase price is $360,000  20% Regular or Appraised Value  54% Amended Value  25% BVO  1% Assigned Sale 101 Days in inventory in 2014 Fall Throughs in 2014  3.41 % Appraised Value  3% for Amended Value  1.58% Buyer Value Option 2015 US TVC SURVEY (CONTINUED)

2016 Best of the West Relocation Summit Summary Improving housing market Increased transfer volumes Declining employee reluctance to relocate Effective relocation remains dependent on skilled mobility professionals to guide the process, control costs, ensure compliance, keep mobile employees productive and provide proactive advice to ensure the right talent is at the right place at the right time US TVC SURVEY (CONTINUED)

2016 Best of the West Relocation Summit Questions WRAP UP