Stakeholder/employee benefits

WXY are furniture makers, and employ 12 staff.  They have not set up a pension for their staff, and would like to consider the options.  They are aware of Stakeholder.

Like many small businesses, WXY have been concerned with cashflow and trying to keep expenses under control.  They have nominated a Stakeholder provider, but none of the staff have chosen to contribute.  The pay review for staff is due in a few weeks time.

With advice from Ovation, the company structures the pay review to include a 3% pension contribution, which is to be matched by the employee.  Unlike salary, pension contributions do not attract National Insurance, and this provides a cost saving for the employer.  Employee contributions are paid net of basic rate tax, reducing the cost to staff.

In addition, a Death In Service scheme is set up for those employee who join the pension scheme.  This provides life cover of 4 times salary for the employees families, and is paid for by the company.  The cost is relatively minor, and is also a trading expense.

Ovation attends individual staff meetings to explain the benefits of the scheme.  The result is greatly enhanced staff loyalty at only a small additional cost to the company.

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