Employee Benefits
- >Case Study 1
Stakeholder/employee benefits
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 members of the pension scheme. This provides life cover of 4 times salary for the employees families. 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.