CBF

Staff Pensions

Three main approaches to pension design have evolved over the years. These are:
Final Salary Schemes
An occupational scheme providing a defined benefit relative to service and salary, irrespective of investment returns.
Money Purchase Schemes
An occupational scheme providing a defined contribution, the benefit from which will be dependent on the investment returns, achieved on those contributions.
Group Personal Pension Schemes
An individual members plan run through an affiliated group normally sponsored by the employer providing contributions, the benefit from which will be dependent on the investment returns, achieved on those contributions.

Each scheme has it's own merits, however the tendency for the smaller to medium sized companies to lean towards the Group Personal Pension route is becoming more common in view of the onerous obligations sanctioned by the Pensions Act 95 on the trustees of occupational schemes.

Note:
Pension investments are intended as long term investments.

Group Life Assurance
Group Life Assurance is the largest and oldest of group products and, after company pensions and car, is the most popular perk. To a certain extent there is a moral obligation for the employer to provide life cover. It is a core benefit and employers do not want to face a situation where an employee dies and there is nothing in place to cover outstanding financial commitments or debts.

There are two types of death in service benefit available under a Group Life scheme. The first being life cover in the form of a lump sum and the second is the provision of a widow's and/or a dependant's benefit in the form of a pension.

It is very attractive from both the employer and employee point of view because it is relatively inexpensive and tax efficient; tax relief at corporation rate on premiums, no tax charge to employee and tax-free benefit paid to dependants under trust. Also there may be no medical underwriting, so employees who may be uninsurable in the context of the individual market may obtain a certain level of cover through a group scheme.

Group Permanent Health Insurance
Offering income protection is simply an extension of the 28-week statutory sick pay employers already have to pay and can solve the moral dilemma of how to treat an employee who is off work, long term sick. Although morally the employer may wish to continue to employee the individual, profitability and cash flow may affect the decision. PHI cover can therefore assist both employee and employer without an excessive drain on cash flow.

In addition, the 1996 Disability Discrimination Act specified, wherever possible, a company would have to define a new role for an employee deemed to have become disabled during the period of employment with that firm. Having a Group PHI policy in place can therefore be beneficial especially for companies who do not have a large human resources budget. The PHI cover therefore pays for the retraining and rehabilitation needed if there is going to be a change in role.

Cover generally only costs between 1% and 2% of the company payroll. This is relatively inexpensive and is also tax efficient; tax relief at corporation rate on premiums, no tax charge on premiums paid by the employer on the employee as the benefit, when paid, is treated as earned income and taxed under schedule E and subject to National Insurance contributions.

Group Private Medical Insurance
Everyone is familiar with the problems faced by the NHS: a shortage of capital; lengthy waiting lists; and an inability to cope with the demands of the ill. One of the principal reasons for companies to take out Private Medical Insurance is to ensure staff, particularly those in key roles, can be treated and return to work as quickly as possible. From the individual's point of view it is all about getting treatment when it is most convenient. Scheme structures can vary dramatically, however the administration and service offered by the provider can also be a major factor.

Group Critical Ilness Insurance
Not yet a major benefit for all, however, to some, the provision of a lump sum on the diagnosis of a critical illness is becoming a major part of their financial planning. The provision of Critical Illness can allow the employer to cease the employee's contract of employment in the knowledge that the employee has not been financially abandoned.

Loans and Commercial Morgages

Rest assured though we scour the market for the best rates available, and are confident enough to guarantee you a mortgage even if you have been declined elsewhere, so long as you only wish to borrow up to 75% of the property value.