Employee Benefits Scheme
Employee benefit schemes are not just for the big companies
Death in service benefit – Life assurance for your Staff. Protects an employee’s dependants if they should die unexpectedly in service.
Income protection for employees – Pays an alternative income if employees are unable to work as a result of long-term illness or injury.
Group critical illness cover – Provides a tax-free lump sum in the event of a number of illnesses such as cancer, heart attack and stroke.
These three areas of cover can be provided in any combination for any number of employees.
We’ll sit down and help you identify the level of cover, then because we are independent, we will look at the whole of the market and make our recommendation.
Time and again it can be seen that employers who provide benefit schemes are rewarded with higher impetus, increased loyalty and better performance than those who don’t. Plus employers tend to draw higher quality staff from the outset. As an employer, you need an experienced independent adviser who you – and your employees – can trust to bespoke, roll out and manage a mutually effective staff benefits scheme.
How much does it cost?
Obviously because of the numbers of staff being covered, age groups and professions covered, costs will vary.
Full-blown group cover typically costs between 1% and 1.5% of gross payroll. Limited-term cover of two to five years can cost between one third and half of this.
What are the legal implications?
Employers must ensure the commitments they make in their contracts of employment are in line with the benefit delivered. They must also check that their stance on issues such as termination age and which sections of the workforce are covered comply with employment law. Insurers can help employers comply with legal obligations at the claims stage, such as requirements to make ‘reasonable adjustments’ under the Equality Act 2010.
What are the tax issues?
Group income protection cover does not constitute a PllD liability for employees, but benefits which are paid monthly via the employer’s standard payroll system have income tax and national insurance (NI) deducted from them. Schemes are not subject to insurance premium tax (IPT) and, if offered to the majority of employees, are normally an allowable business expense.
Where can employers get more information and advice on group income protection?
Industry body Group Risk Development (Grid) provides information and lists intermediaries at: www.grouprisk.org.uk. Information is also available here.