Why are employee benefits important?
If your employees are valuable, they are worth looking after. If
they feel that you care for their well-being, they are likely
to reciprocate by caring for you and your business.
Normally employee benefits should not be available without
a certain commitment on the part of your staff. Employee
loyalty is important. You may therefore consider that any employee
benefits package is only available after a minimum period of
service, perhaps six months or one year.
The principal types of employee benefits are as follows:
For further information click on one of the headings or
read on:
Group Pensions
Retirement is usually the most expensive benefit for the employer
to provide. To provide a pension of approximately 50% of
the salary at retirement, it is generally accepted that this
would require contributions equivalent to at least 15% of
the salary for a normal working life of 40 years.However,
as most people do not start paying into a pension until they
are say 30 or even 35, they are unlikely to work a more than
a further 25 to 30 years, so a somewhat higher percentage
of salary needs to be saved.
A sensible solution is
that the employer pays contributions equivalent to 15% of
salary and the employee contributes a further 5%.
Group Income Protection
What happens if your employees become disabled or suffer from
long term illness? Perhaps you already have a contractual
obligation in place to continue paying them for up to a period
of say 3 months, or 6 months. But after that they are “on
their own”, and if they have dependants, so much the
worse. Unfortunately the State Benefits will probably
do little more than keep them just at or above the poverty
line.The answer is an income protection policy, which will
provide an income until age 65. This can be provided as a
group policy for all your eligible staff at very competitive
rates.
Group private medical insurance
If your employees are indispensable, or if you wish
to show them that you are concerned about their wellbeing,
then private medical insurance will enable them to obtain
fast treatment in case of illness or accident.
Group critical illness insurance
What happens if an employee becomes ill in a way that prevents
his continuing to work? A long established benefit arranged
by good employers is called critical illness insurance. This
provides a lump sum as a form of compensation which the employee
is able to use in any way he wishes.
Group death in service insurance
(life insurance)
What happens if an employee dies while working for you? Who
provides for his dependants or nearest and dearest? A
long established benefit arranged by good employers is a “Death
in Service” insurance, usually based on an amount equal
to three times annual salary
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