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Corporate Staff Benefits
We are all guilty of spending a small fortune on recruiting staff and training only to lose them to a competitor.
By employing a comprehensive staff benefits package the staff retention rate increases significantly.
In addition your employees feel more valued and cared for.
We advise on various staff benefits such as:
Company Pensions
Group Stakeholder Pension Schemes
- A Group Stakeholder Pension Scheme (GSHP) is a collection of stakeholder pension schemes (SHPs) provided by an employer for its employees.
- A Stakeholder Pension Scheme is a type of defined contribution arrangement.
- It is essentially an investment policy that provides an income in retirement.
- A Stakeholder Pension Scheme differs from a personal pension plan because it has been designed to incorporate a set of minimum standards laid down by the Government. These include:
- a charging structure that is capped at a maximum of 1.5% a year for the first 10 years and 1% a year thereafter;
- there can be no penalties on altering or stopping contributions or on transferring the benefits to another scheme; and
- providers may only refuse to accept contributions if they are less than £20.
- The policyholder contributes to the plan, the money is invested and a fund is built up. The amount of pension payable when the policyholder retires is dependent upon:
- the amount of money paid into the scheme;
- how well the investment funds perform; and
- the 'annuity rate' at the date of retirement. An annuity rate is the factor used to convert the 'pot of money' into a pension.
Group Personal Pension
- A Group Personal Pension Plan (GPP) is a collection of personal pension plans (PPPs) provided by an employer for its employees.
- A Personal Pension Plan is a type of defined contribution arrangement.
- It is essentially an investment policy that provides an income in retirement.
- What distinguishes a Group Personal Pension Plan from an individual personal pension plan (PPP) is that the charges levied by the provider under the GPP may be lower than under the equivalent PPP. The provider, because they are dealing with bulk business, may be able to offer a reduction in their normal charges.
- The policyholder contributes to the plan, the money is invested and a fund is built up. The amount of pension payable when the policyholder retires is dependent upon:
- the amount of money paid into the scheme;
- how well the investment funds perform; and the 'annuity rate' at the date of retirement. An annuity rate is the factor used to convert the 'pot of money' into a pension.
Salary Sacrifice
What is Salary Sacrifice
- Salary Sacrifice is offered by some employers as a means for their employees to receive increased pension scheme contributions.
- You sacrifice part of your salary. The amount you sacrifice is paid to your pension plan directly by your employer, rather than being paid to you.
- As a result of you having a lower salary, both you and your employer pay less National Insurance Contribution (NIC). As part of the salary sacrifice deal, your employer pays all or part of their NIC saving to your pension plan along with the sacrificed amount.
- For example, you earn £30,000 a year and decide you want to salary sacrifice £1,000. Your new salary is £29,000, with the employer paying £1,000 to your pension plan. You pay less NIC (and in some cases Income Tax) because your salary is lower. Your employer also pays less NICs and pays a percentage of their saving to your pension scheme.
- The percentage of NIC saving your employer pays is defined by them as part of their salary sacrifice offer. It could be anything between 0% and 100%, with most employers paying 50%.
Advantages and disadvantages
Advantages |
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You pay less NIC (and in some cases Income Tax) because your income is lower; and |
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You may receive a boost to your retirement savings because your employer may add a percentage of their NIC saving to your pension contribution. |
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Disadvantages |
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Life cover - your employer may provide you with life cover, which is usually calculated as a multiple of your salary. As your salary is lower under salary sacrifice, so may your life cover. Some employers may continue to provide life cover at the pre-salary sacrifice pay. |
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Refund of contributions - some occupational pension schemes offer a refund of employee contributions on leaving with less than two years service. The contribution paid as part of the salary sacrifice arrangement is not an employee contribution so would not be refunded. |
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Mortgage borrowing - mortgage lenders usually calculate the maximum borrowing level as a multiple of salary. As your salary is lower under salary sacrifice, your mortgage borrowing may be affected. |
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Statutory Maternity Pay - SMP is available if you earn above the Lower Earnings Limit (£5,044 in 2010/11) prior to going on maternity leave. If salary sacrifice brings your salary below this level, your entitlement to SMP may be lost. |
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State Second Pension (S2P) - this additional part of the state pension is calculated with reference to your earnings. Any reduction in your earnings between the Low Earnings Threshold (£14,100 in 2010/11) and the Upper Accrual Point (£40,040 in 2010/11) may affect this entitlement. |
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State Second Pension (S2P) - as with SMP (see 4 above), if salary sacrifice brings your salary below the LEL, your entitlement to S2P may be lost. |
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Group Income Protection
- Group income Protection helps the company safeguard the wellbeing of the employees by providing a significant proportion of an employee's income should they suffer long term absence due to illness or injury.
- Reduces the financial burden on the company.
Benefits to the employer |
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Improve your employee benefits package to aid recruitment and retention. |
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Provide a continued income for employees suffering long term illness or injury. |
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Provide financial assistance at a reasonable cost with tax relief on contributions. |
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Insurance company managed funds and their range of funds run by other managers. |
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Benefits to the employee |
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An employee’s income is protected if unable to work because of long-term illness or injury. |
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Expert help and support is often available from the insurer during rehabilitation to help employees return to work. |
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Continued disability cover without further medical evidence when employee returns to work. |
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Group Private Medical Insurance
- Group Private Medical Insurance is designed to cover the medical costs of private treatment for curable, short-term illnesses or injuries.
- The company avoids lengthy absences and high business overhead caused by staff being off work due to acute conditions and having to wait for treatment on the NHS.
Benefits to the employer |
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Improve your employee benefits package to aid recruitment and retention. |
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Reduce absenteeism. |
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Promote healthy living. |
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Improve staff morale. |
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Benefits to the employee |
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Prompt diagnosis and treatment bypassing the NHS waiting list. |
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Employees choose where they receive treatment and the specialist who treats them. |
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Treatment in hospitals throughout the UK. |
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Receive treatment in pleasant surroundings. |
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Group Life Insurance
- Group Life Cover (‘Death in service’) provides a lum sum to your employee’s family and dependants if they were to die whilst employed by your company.
- Simple and low cost.
- In the event of death the policy would pay out a lump sum as a multiple of the employee’s salary.
Benefits to the employer |
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Generally expected as a benefit provided by an employer for the employees. |
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Premiums normally allowable as a business expense. |
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Demonstrates your interest in looking after the welfare of your employees and their families. |
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Benefits to the employee |
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Peace of mind for the employee so that they know a lump sum is payable to their family in the event of death. |
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A tax free lump sum is paid out promptly on death to surviving family. |
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Insurers often provide a bereavement service to support the loved ones of the deceased. |
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Group Critical Illness Insurance
- A Group Critical Illness Scheme will provide an employee with a tax free lump sum should the employee be diagnosed with any one of the critical illnesses defined in the policy terms.
- Statistics show 1 in 4 people will suffer a critical illness between the ages of 30 and 60*.
- helps the company safeguard the wellbeing of the employees by providing a significant proportion of an employee's income should they suffer long term absence due to illness or injury.
- Reduces the financial burden on the company.
*Source: Datamonitor UK Health Insurance
Benefits to the employer |
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Improve your employee benefits package to aid recruitment and retention. |
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Provide a cash injection for employees suffering a critical illness. |
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Remove the awkward decision regarding financial support for a critically ill employee. |
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Benefits to the employee |
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Financial protection during difficult times. |
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Ability to fund adaptations to their home such as wheelchair access or a chairlift. |
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Ability to fund to fund private medical treatment , helping them return to work quicker. |
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