The subject of employee benefits is increasingly becoming a bigger issue.

As state benefits become less year on year, employees are looking to employers to provide a package of flexible benefits which may include Pension Scheme , Death in Service benefits, Income Protection or Medical Insurance.

At Kudos we believe that a good employee benefits package can be ruined by poor communication. 

The implementation and ongoing administration and information flow with employees is of paramount importance, and we believe that this should be done both on-line and with face to face contact. 

How many employees actually know the true value of their employee benefits and therefore is the employer simply wasting money by giving benefits which the employee does not appreciate. 

By giving on-line access to their benefits, and regular reviews and newsletters, along with free phone access to our call centre where they can be provided with information at any time, we believe that working with employers we can provide a solution to most needs. 

We provide a free review of a company’s existing arrangements, and advise on the improvements that could be made to operate the scheme on a better value basis, and more efficiently.

We believe that in most cases we will be able to demonstrate a direct improvement in the package.

Pension

Many employees look on their pension as their main employee benefit. 

There are many different types of scheme some providing better benefits than others. 

Final Salary Scheme 

The market for final salary schemes has contracted in the last few years due to heavy regulation and increasing burden on employers. 

Many existing schemes have been wound up or closed to new members. 

The employer gives a promise to the employee where they will receive a pension of an amount which is related to their final salary depending on the length of service with the company. 

As this benefit is promised (not guaranteed), it is generally considered to be the best type of pension scheme available to employees. 

Occupational Money Purchase Scheme 

These schemes which can either be contracted in or contracted out of the State Earnings Related Pension Scheme are run on a similar basis to that of final salary, but without many of the guarantees. 

The maximum benefits are related to the employee's length of service and salary, but the employee will purchase units in the fund of their choice with the provider of the scheme. 

Group Personal Pension Plan 

This is where a collection of personal pension plans will be arranged under the guise of a group scheme arranged by the employer. 

The employer’s commitment to the scheme is to administer and provide a contribution to the scheme. 

If an employee were to leave the service of the company, they simply take their personal pension with them, and the employer has no further involvement with them. 

In order to achieve exemption from the Stakeholder pension rules which were introduced in April 2001, a group personal pension must currently contribute 3% of the employee’s basic salary. 

Stakeholder Pensions

Introduced by the government in 2001 these plans were designed to give employees an outlet for pension monies with employers who have no pension arrangements in force. 

Please see our Stakeholder pensions section for further information on this

Death in Service

These schemes will provide the employee with a sum of money in the event of death while employed by the employer.

This will typically be up to 4 times the basic salary of the individual, and they will provide a nomination form that will ensure the trustees would pass the funds to the beneficiaries requested.

This should normally be done free of inheritance tax.

This can be an inexpensive benefit but much valued by a workforce.

Income Protection

As the government only pays statutory sick pay in the event of a long absence from work, many employers will provide a period of full or half salary to the employee in the event of a prolonged absence from work.

However, as the employer is unlikely to keep the employee indefinitely, it is very often the case that the employer will specify in the employee’s contract how long the payment will be made for, and then arrange for cover to pay the employee by way of an income protection plan.

These will typically provide a benefit of around 75% of the employee’s salary and this can be paid out after an absence from work of 4, 13, 26 or possibly 52 weeks.

The payment would normally continue to the employee until the normal retirement date.

This benefit in payment is taxable.

Medical Insurance

Many employers will decide to provide private medical insurance for some or all of their employees.

This will provide cover for treatment of illness or operations etc at a private hospital instead of waiting for treatment on the National Health Service.

Obviously there are very many levels of cover and extras which can be added to the plan such as dental treatment etc.

This is the only employee benefit that is treated as a benefit in kind for tax purposes.

Flexible Employee Benefit Package

We can deliver a solution for flexible employee benefits packages that supports –

• fixed, flexible and mixed benefit schemes set up and administration
• employee communication
• employee self service
• providing employees with a statement of their remuneration benefits, costs and entitlements

The technology is made available to employers and employees over the Internet or via their own company Intranet.

This allows employees to have an element of flexibility within their benefits package, perhaps substituting extra holidays for Death in Service benefit if they were single with no commitments, or increasing pension entitlement and forsaking company car if the employee was nearing retirement.

There are many ways in which to administer and provide these schemes which are of a truly flexible nature.