In the second of a new series ‘What’s the answer?’ we ask two experts to provide their solutions to your problems; this week Andrew Smith of Towry Law and Alison Wallace of Steptoe & Johnson solicitors present their ideas on what to consider when introducing a flexible benefits policy.
“I am looking at introducing a flexible benefits policy to my company. Can anyone share their policy and advice on what benefits they offer, how they calculate salary sacrifice elements etc.”
Andrew Smith, Towry Law
As an Employee Benefits Consultant I see lots of different companies and their approaches to flexible benefits. The beauty of flexible benefits is that an employer can also be flexible in how much or how little you offer and this can change over time.
Typically companies have core benefits (that everyone has) which are usually pension and death in service. However, often the death in service cover is reduced to 1x salary as a core benefit from say the 3 or 4 x salary that was previously there.
Then the flexible benefits typically on offer are extra life cover for the employee and/or their partner, critical illness cover, dental cover, private medical insurance, the buying and/or selling of holiday and private health insurance. Ultimately though the employer can pick and choose how flexible they wish to be.
Alison Wallace, head of employment practice at Steptoe and Johnson
Flexible benefits involve legal, tax and payroll issues. Before you embark on introducing a policy, you should look closely at the importance to your company of aligning reward with its business strategy and how important a priority flexible benefit will be.
Finding out what your employees really want from a flex scheme first. Flexible benefits also have an impact on pensions and you will need advice on how to integrate salary sacrifice and pension contributions.
With an eye on age discrimination, entitlement to flexible benefits should be contribution related rather than service related. Finally, do involve your line managers in the process to ensure they buy into it.
HRZone highly recommends that any answers are taken as a starting point for guidance only.
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