You’re satisfied with the employee benefits you have in place and are comfortable with the associated costs. But are you confident your employees fully understand the benefits which are available to them? If you have invested time and money into developing your benefits package, it is vital that you have an effective communication strategy in place to make sure your staff are taking full advantage of what is on offer. Below are some examples of aspects you may wish to consider when developing your communications strategy:

Communication

As the saying goes, ‘communication is key’ and often we find that staff are told about employee benefits when they join a company, as part of their induction, but this doesn’t get mentioned again. Regular communications thereafter will ensure everyone remains informed and engaged. This could include specific communications during different lifestyle events e.g. marriage/the birth of a child.

Appoint Employee Benefits ‘Champions’

One way to fully involve employees in the communication plan is to appoint employee benefit champions. Seeing fellow employees being proactive and positive about the benefits schemes will encourage the workforce as a whole to get involved and participate. This is a great way to spread knowledge and enthusiasm.

Put it in writing

All information about the benefits you offer should be in writing. This should be in a format which is easy to read and digest. Every employee should be given a copy of your benefits handbook, and an overview on how to locate commonly sought information.

Use of Online Platforms

If your company uses an intranet site, this can be a great platform to communicate information about your benefits. You could also look to maximise your use of free social media platforms such as Twitter or LinkedIn. An internal group could be created to keep employees up to date on the benefits they have access to.

Staff feedback

Employee opinion surveys are a great way to measure the level of understanding that employees have about the benefits you provide and how engaged they are. These surveys can also provide you with an indication of what benefits your staff value the most. Effective communications don’t need to be costly. You can maximise the use of systems you already have to provide information in a quick and easy way. Wingate can help you to develop your employee benefits strategy, to ensure your staff are making the most of the valuable benefits you provide for them. If you would like to discuss further, please don’t hesitate to get in touch.

Pension Governance: Why it’s important

Following the introduction in the Pensions Act 2008, of Automatic Enrolment, most employers have now staged and set up their Qualifying Workplace Pension scheme. There is a misconception that Auto Enrolment is finished, and it is back to business as usual. Unfortunately, its not that simple. The Pension Regulator (TPR) also requires employers to make sure that their workplace pensions are monitored regularly and deliver good retirement outcomes for members.

TPR wants to see all pension schemes encompassing 6 key elements, the first 3 listed below are mostly relevant for scheme set up whereas elements 3-6 cover activities that will remain relevant throughout the life of a scheme. TPR believe that if schemes follow these 6 principles in their design, set up and ongoing operations it will help ensure the scheme delivers ‘good member outcomes’.

1. Durability, Fairness and Delivery: TPR wants to see that a company pension offers a suitable default fund, carries transparent costs and charges and has steps in place to protect its members’ pension assets against loss of their savings.

2. Establishing a framework: TPR wants to see that all parties involved in managing a company pension scheme have clearly defined roles and that they continually carry out these roles to a highly competent level. The parties involved could include the employer, the chosen pension provider and the appointed advisers.

3. Accountability: Once the roles for each party have been defined, TPR expects each party to be accountable for their part in the ongoing management of the pension. TPR expects each party to have the required resources to carry out their role efficiently.

4. Ongoing Pension Governance: Due to the long-term nature of pensions, TPR wants to ensure that the scheme continues to have excellent ongoing pension governance and that internal controls and monitoring are in place to meet its objectives so that the best interests of the member are prioritised.

5. Record Keeping: TPR regards accurate record keeping as being of paramount importance so that simple and efficient reference can be made to past events.

6. Communication: TPR want to see that communication to members is clear and concise throughout the life of the scheme. This communication covers the various stages of a pension, namely joining, investment decisions and converting a member’s pension to an income including the promotion of the Open Market Option.

This is in addition to re-enrolment every 3 years and dealing with opt-outs and opt ins. I expect you are thinking when we are supposed to find the time to do this as well as running a business. You are not alone, TPR has recently published research carried out by OMB in the report “Ongoing Duties Survey-Summer 2018” which highlighted in the report that 12 % of employers found it difficult keeping up with their duties. 27% of these employers had problems keeping up with regulations and 31% finding the time.

In addition, of the employers who worryingly were unaware of all their ongoing duties, specifically the three ‘live’ requirements of keeping records of all automatic enrolment activities, monitoring the ages and earnings of staff to check their eligibility and for enrolling and writing to eligible staff, when these employers were informed of these duties, between 20% to 38% of them were not confident that they could complete each of these duties.

Why is Pension Governance So Important Now?

Well TPR is carrying out spot checks to ensure employers are complying with their pension duties. The checks will help TPR understand whether employers are facing any unnecessary challenges that they can help them with, such as helping them improve their systems but they will also highlight employers who have not taken the required steps to become or remain compliant, paving the way for enforcement action.

Darren Ryder, TPR’s Director of Automatic Enrolment, has said: “The vast majority of employers are continuing to provide their staff with the workplace pensions they are entitled to and are keeping up with contributions after that point. These visits help us to identify why some are not, so we can take action where we need to.

“Automatic enrolment is not an option, it’s the law. If employers are not complying with the law, we will use our powers to make them comply – which could mean the unwanted Christmas present of a fine or even prosecution.”

In 2019, TPR have carried out country-wide inspections that were targeted at employers where TPR data and intelligence teams identified a risk of noncompliance. As a result, 74% of spot checks revealed breaches of pensions legislation, with 76% of these resulting in enforcement action.

The TPR has taken enforcement action against over 4,000 employers failing to carry out their re-enrolment duties in this year alone, resulting in over 800 penalty notices and fines being issued for continued non-compliance.

The key point is Pension Governance can’t be ignored. Every employer needs to have a clear pension governance strategy which demonstrates to the TPR compliance with Auto Enrolment legislation in case of a spot check from the TPR.

We would strongly recommend the Pension Governance process is outsourced to a third party such as Wingate to demonstrate the robustness and independence of the process and continued compliance with TPR regulatory requirements. This could avoid an unexpected fine, backdated contributions and the additional administration involved in remedying any errors. Please contact Wingate if you would like to see how we can assist you with your ongoing pension governance.

You’d be forgiven for assuming that income protection is a benefit people need later in life when age-related illnesses and conditions become more common. However, this really is a benefit which should also be valued by younger members of your workforce. More and more people in their 30s are making claims for Income Protection benefits. Cover protects your employees if they are unable to work due to a physical condition but benefit will also be paid for employees who suffer with mental health conditions. Mental health is the second most common cause of income protection claims which may go some way to help explain the increase in claims for those in their 30s.

 

Lifestyle events also often prompt people to think about what cover and protection they have in place. Examples of events which may result in somebody valuing benefits like income protection would be buying a property, having a child or getting married.

Buying a property: When purchasing a property, it is of utmost importance for somebody to protect their home and the ability to make monthly mortgage payments, in the event of being unable to work. Income protection cover provides a replacement monthly income if your employee is unable to work because of long-term illness or injury.

Income protection should by no means be classed as a ‘sick pay’ policy. In addition to the financial benefits, the majority of income protection providers promote early intervention services and rehabilitation support services. This may include access to counselling or physiotherapy to help employees recover and return to work if appropriate.

It’s not only house buyers who need protection. If you’re renting and unable to work through illness or injury, bills still need to be paid if a tenant wants to remain in their property.

Having a child: Starting a family, or extending an existing one, is a very exciting time. However, this means your employees will have dependants relying on their income for them to be looked after. What would happen if an employee’s life was turned upside down by illness or injury? Income protection can help to provide financial support for those affected by illness or injury.

Getting married: Marriage is another event which can urge employees to consider income protection cover. Consider when partners are dependent on each other for splitting financial commitments such as mortgage payments. If one were to be hit by unexpected illness or injury, having protection in place could mean the difference between keeping their home or having to sell up and move.

 

Your younger staff may not fully recognise the benefit of employee protection benefits until they reach some of these milestones in their lives.

 

What should companies do to help all employees recognise the full benefit of a group Income Protection scheme?

  • Identify all additional benefits: Most income protection schemes will include additional ancillary benefits which are included free of charge. These may include an Employee Assistance Programme and Early Intervention and Rehabilitation services.
  • Promote these benefits to your staff: Regularly remind your staff of the additional benefits they have access to. Counselling services are available through an Employee Assistance Programme and promotion of these services is key to driving engagement
  • Review your employee benefits package: If you don’t have cover in place already, introducing policies such as income protection will provide your employees with vital support when they need it the most

 

We can carry out a free no obligation review of your employee benefits package. If you would like to find out more, please do not hesitate to get in touch with your usual contact or at:

@: info@wingatebs.com

T: 01883 332260

Keep It Simple Stupid

Let’s be honest, pensions are not the most exciting subject in the world but we probably all acknowledge that they are very important. I have been to many a party, night out etc and have been chatting to people about everything and nothing when the old, ‘What do you do for a living?’ question comes up. In my mind, I want to say ‘dolphin trainer’ or ‘lion tamer’, but the words ‘I’m a Pension Adviser’ just comes blurting out and funnily enough I am left standing on my own…

The lack of excitement around pensions is not helped by the way that pension providers give information to consumers. Often we receive our annual pension statement through the post in the form of a big pack and if we are lucky, we’ll read the first page, maybe the second and simply file it in our dusty old pension file where the last 10 years annual statements are all stored. We all have the best intentions of reviewing our pension/s one day but that day tends to happen when it’s a little too late and retirement is looming leaving us with little time to take any remedial action on the value of our pension.

A recent government Automatic Enrolment review has found that less than 14% of people read and understand their annual statements and this represents a “missed opportunity” for the industry to engage and educate savers. As a result, the Pensions Minister has suggested a new simplified two-page annual pension’s statement in a bid to provide a best practice template for the industry. The proposed simpler annual statement consists of just two sides of A4 paper and includes the information that matters most to people saving for retirement. It clearly signposts to other detailed information that can sit separately on an insurance company website. This reflects legal requirements and can be amended by providers using their own branding. The simpler annual pension statement is available to view at the following link https://www.plsa.co.uk/Policy-and-Research/Document-library/Simpler-annual-pension-statement

Whilst this is a good step forward, there is still a long was to go to raise the profile of pensions. It seems as though the balance of responsibility is moving away from the government and some of this responsibility sits with the employer to help with pension education.

Even if staff are not actively engaged with pensions, spending 30 minutes a year to understanding whether your investment is right for you, understanding what you are on track to receive from your pension and the state pension and how to make up any shortfall, is not an overly onerous commitment but it’s hugely important and beneficial.

Wingate Benefit Solutions has designed a pension employee engagement service for employers to try and de-jargonise pensions for employees (just like the proposed new statements) with a view to getting staff engaged with pensions and planning their futures. If you a looking to understand how pension education can help increase employee appreciation of the provided pension arrangement leading to greater staff retention and engagement, please do not hesitate to contact us.

As we’ve frequently referenced in previous insights, an employee’s mental health can have a significant influence on their performance and behaviour at work and one of the biggest issues affecting an individual’s emotional wellbeing is their financial situation.

There is often a link between someone struggling with money and poor mental wellbeing and if an employee is feeling low, it can make it tougher for them to manage their money. I regularly meet employees to discuss their pension planning and there seems to be a common theme of financial anxiety.  This clearly has an impact on the individual but is also likely to affect your business.  An employee who is worrying about money may find it difficult to concentrate on decisions, or they may be losing sleep or feeling worried which will impact their performance and productivity at work.

Financial worries take many guises, from struggling with debt, saving for a first home through to people in their late career striving to plan for the retirement they desire.

In recent years, there has been a shift in responsibility for financial matters from the state and employer to the individual and it is becoming increasingly clear that many employees are not equipped with the knowledge to make confident, informed decisions about their finances.

So what can a company do to help its staff?

Helping support an employee’s financial wellbeing through the provision of education services is an important part of any employee benefit strategy.  In my experience, many companies think of financial education as an expensive ‘nice to have’ and prioritise other benefits such as pension contributions, life and health insurance.  However, financial education and improving an employee’s financial wellness can have a much more positive impact on performance and wellbeing than other company-funded benefits.

Financial education is more effective if it is delivered when it’s most relevant.  The financial concerns and worries for someone in their early career are very different from those who are in the middle of their working lives or for those who are planning to face the transition in to retirement.   The ways in which the education is delivered should also be varied to reflect your employee’s requirements.

By offering employees help in managing their finances, employers are making a long-term investment in their workforce.  The benefits of financial education are clear; helping to support employees and improve their mental health will have a positive impact on their lives as well as business.

 

Throughout my time in the Employee Benefits industry, I have been asked to carry out countless reviews on the structure of some Group Risk policies (typically Group Life Assurance and Group Income Protection) with a view to providing feedback on potential issues or risks that may exist for the Employer. On the whole, I can say that over 60-70% of these reviews confirmed the job the employer or their advisers are doing is good and only very small tweaks or changes to policy structures and/or wordings are recommended.

However, some reviews have highlighted gaping holes in cover and as such huge potential liabilities sitting with the employer, without them knowing! An example of such areas of risk are:

Removal of the default retirement age

In 2011, it became unlawful for an employee to ‘retire’ a member of staff based on age alone. Gone are the days where a member of staff reaches age 65, receives a carriage clock from their employer and spends the rest of their days playing golf or bridge. Employees tend to look for a better work/life balance and therefore may choose to reduce hours to facilitate these wishes whilst remaining employed, as they want to remain occupied and keep their mind busy. This is certainly the case for my 70-year-old Mum.

Even now we review many Group Life Assurance (Death In Service) policies that still cease at age 65 which based on current trends is not suitable as many employees continue to work into their late 60’s or early 70’s. It is highly likely that a company’s employee life assurance benefit is referred to in an employment contract or staff handbook and therefore if an employee were to pass away post age 65 then without the existing policy having been amended to reflect the aforementioned change, the employer could be looking at a potentially crippling liability.

The good news is that an Employer does not have to insure an employee indefinitely, but they should ensure that their policy (and subsequently reflected in any contract/handbook) are amended to cease at for example, ‘State Pension Age (SPA) or age 70, whichever is the latter’.

How does your policy and employee documentation read?

Group Life Trust set up

Although many employers have Group Life Assurance (Death in Service) policies, it is rare they are ever called upon. That doesn’t mean to say an employer shouldn’t consider what would happen in the event of a claim and have a process in place to ensure it can receive the benefits and pay on to the deceased employee’s loved ones in a timely manner. The last thing you would want is to provide such a valuable benefit then see delays in this being paid which results in more anguish and upset for the deceased’s beneficiaries.

Many employers shy away from or simply neglect to consider their responsibilities in this area, as understandably, they do not want to tempt fate, but they are also probably unaware of the information and facilities required in order for a claim to be processed quickly and efficiently by an insurer. The following questions may test your ‘readiness’ for such a claim:

*Is your scheme in a Master Trust or do you own our own trust?

*Where is your trust deed?

*Who are your scheme’s trustees?

*Who is your scheme administrator?

*Do you have a trustee bank account ? If not, do you know what the bank would require to set one up and how long this could take?

*Is your scheme registered with HRMC?

*Do you have up to date nomination forms on file from all the employee and are these readily to hand?

 

These are just two common areas of weakness we consistently see but there are many more. We would be more than happy to review your benefit schemes to ensure the structure and accompanying procedures are all in order, taking any concern in this area away from you. For further information on our scheme suitability review please contact the team on 01883 332260.

 

Richard is one of our Strategic Benefit Consultants.

Although Workplace Pensions have dominated the world of employee benefits over the last 5 years, employers are still encouraged to regularly review and refresh their benefits package to ensure the offering remains both attractive and relevant to employees. So how can benefits be delivered in the most positive way, whilst also avoiding the common mistakes that cause badly managed promotions?

There are a number of different areas to consider for any company reviewing its employee benefits package, whether this is in relation to existing benefits in place, or introducing a new arrangement; some of these are listed below.

Suitability

The demographics of your business could be heavily weighted in a certain area, meaning some benefits may be appreciated more than others.  For example, younger employees may prefer a Health Cash Plan compared to older employees, who may prefer full Private Medical Insurance. Higher earners might want to maximise pension contributions to take advantage of tax savings, whilst those with young families may prioritise Life Assurance or Income Protection. Employee Surveys will tell you what is important to your staff which will ensure that the cost of a new benefit is going to be highly valued by the staff.

Timing

When you have decided what to provide, timing the introduction well is essential. It’s key to avoid periods when high numbers of employees are on leave (e.g. summer holidays/Christmas) and/or when business pressures mean your workforce is unlikely to acknowledge the impact. It is also best to avoid clashes with other business changes, when the positive introduction of a new benefit could be overlooked. So carefully consider when is the best time to announce any changes, to achieve maximum positive engagement from your employees.

Delivery

You must ensure that communications are managed properly and work well to support your key message and the smooth running of the improved benefits package. Whether this is done via letter, benefit guides, e-mail or intranet, any new systems introduced should be made completely clear so your staff understand what is being made available. Employee benefits form part of the remuneration package offered so make sure your employees know when they are getting something extra!

Support

Whether managed by you as the employer, the policy insurer/provider, or your outsourced employee benefit consultant, once in place the new benefit should be clearly promoted and communicated to employees. Training for managers is advisable so they fully understand the benefits on offer and can explain them positively. It’s essential that employees know who they can speak to if they have any queries, or require any assistance, when using this new benefit to ensure it’s effectiveness.

Reviews

Your new employee benefit may be suitable, introduced at the right time and include expert delivery and support – but will it always do what you set out to achieve? Considering your workforce may change, or even forget what is available or how to use it, we recommend employers:

  1. Undertake annual reviews to ensure the benefit remains relevant and cost effective in the market
  2. Provide regular updates and notifications to staff to keep everyone engaged
  3. Ensure the benefit continues to be valued by your staff usually best achieved via employee surveys or review meetings

 

Unless they are contractual there is nothing stopping employer replacing one employee benefit with another for any number of reasons – you just need to consider what is in the best interests’ of your workforce before doing so.

If you are considering providing a new employee benefit or restructure of existing benefits and would like further information on how we can help ensure a successful implementation please contact the team on 01883 332260.

Jon is one of our team of Employee Benefit Advisers.

The Employee Benefit world is always changing.  What changes lay ahead and what do you have to do?

Pension Automatic Enrolment 

Increases to statutory minimums Automatic Enrolment seems to have been a success.  A report* by the Department of Work and Pension states that over 9 million people have been enrolled into a work place pension and with only 1 in 10 opting out.

However, the next success needs to be people saving more towards their pensions.  This will happen in April when minimum pension contributions increase. This will have an impact on most employees take home pay.

Early communication with employees is vital to ensure your employees understand this is happening and you must make these increases to remain compliant with The Pensions Regulator.

*Automatic Enrolment Review 2017: Maintaining the Momentum (DWP)

Government to end Fit for Work assessment service

Fit for Work is a Government funded scheme where employers could refer employees for free occupational health assessments once they had reached four weeks continuous sickness absence.

This Government funded scheme is being withdrawn on the 31st March 2018.  This could leave some employers without any fall back option to assess illness or injury of their employees and with no credible return to work plan.

We would recommend that employers who have used this scheme review their private provision of return to work assessments.  Appropriate action should be taken to review your current employee benefits by looking at early intervention services included in your existing Group Income Protection Policy, EAP and/or your Occupational Health provision.  Alternatively, should you not have these benefits, implementing these facilities so your business has a clear plan on how to deal with absence and return to work plans.

Childcare Vouchers

Childcare Voucher are a means for employed parents to reduce their childcare cost.  By using salary exchange to purchase vouchers through you Childcare Voucher scheme, employees save significant amounts of tax and national insurance on the value of the voucher.

We now have a date when the Government are going to phase out Childcare Vouchers and replace them with Tax Free Childcare.  Whilst Tax Free Childcare is open to a wider range of parents, e.g. the self-employed, it may not be as beneficial to your employees as the current scheme.

If your employees are already in the Voucher scheme, they can retain the right to remain in the scheme.  Employees who still want to partake in the Voucher scheme must have a deduction made from salary in the March pay period to qualify.  After this date, no new employees are able to join the Voucher Scheme.

Again, early communication with employees is vital to give employees time to consider the two options and allow time for employees to join your voucher scheme by March payroll cut off.

 

With these changes happening from April there is a lot for employers to consider and communicate to their employees. Reviewing current practices and employee benefits then communicating to staff is vital in keeping your work force both informed and engaged. 

We can provide a free no obligation review of your current practices and benefits. For details please contact us on 01883 332260 or at info@wingatebs.com

Below are some of the results of a recent independent employee benefit survey of over 300 employers which we thought may be of interest to you.

Many of the answers highlight the value of an effective online benefit & communication platform, something we can provide via our Wingate PlusYou product. Wingate PlusYou is a straightforward, effective and surprising low cost online benefit platform which we can demonstrate face to face or online and usually provide a no obligation quote for within 24 hrs.

For further details of our Wingate PlusYou product please contact one of our employee benefit advisers on 01883 332260 or at info@wingatebs.com .

Survey Answers

  • 74% of respondents enable staff to contribute to their defined contribution pension scheme via a salary sacrifice arrangement
  • 81% of respondents offer employee benefits because they are an effective retention tool
  • 76% do it as they are an effective recruitment tool
  • 72% do it to support employee health and wellbeing
  • 61% of respondents name the desire to be seen as an employer of choice as a key issue shaping their organisations benefits strategy

 

  • 44% of respondents fund their employee benefits offering solely themselves whereas 49% part fund their offering
  • 50% don’t envisage this funding situation to change

 

  • From the respondents, here is a breakdown of salary sacrifice arrangements offered:
    • 93% offer Childcare Vouchers
    • 78% offer Cycle to Work Schemes
    • 72% offer pension
    • 37% offer Give-As-You-Earn/payroll giving
    • 36% offer holiday trading
    • 25% offer Health Screening
    • 22% offer Gym Membership
    • 17% offer cars

 

  • On the Group Risk side of things
    • 84% offer Death In Service
    • 53% offer Income Protection
    • 36% offer Critical Illness
    • 30% offer Personal Accident Insurance

 

  • On the Health & Wellbeing side of things
    • PMI is offered in 71% of cases
    • EAP in 68% of cases
    • Health Screening in 50% of cases
  • In terms of measuring engagement levels, 69% of respondents do this via a staff survey