Employee Benefits Consultants: directory of firms

The Pensions Regulator states that under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it, and calls this automatic enrolment. GOV.UK sets the assessment criteria for the employee: your employer must automatically enrol you if you are aged between 22 and State Pension age and you earn at least 10,000 pounds a year.

The Pensions Regulator sets out the sequence for a new employer: choose a pension scheme as soon as possible because it may take time; work out who to put into a pension on your duties start date; write to your staff within 6 weeks after the duties start date; and declare compliance within 5 months after the duties start date.

Re-enrolment is an ongoing duty rather than a one-off event, and the regulator provides a declaration of compliance service for it. Diarise the dates. Missing the declaration is one of the most common and most avoidable enforcement triggers for a small employer.

Designing a benefits programme, running a tender, comparing scheme administration and handling employer duties is consultancy. Recommending a particular pension product or investment to an individual member is a different thing, and it is regulated.

The FCA states that firms must not start performing regulated activities while an authorisation application is under review unless an exemption or temporary permission applies, and that carrying on regulated activities without being authorised is a criminal offence with enforcement action available. The FCA's Perimeter Guidance Manual is the reference for whether a specific activity is regulated.

The practical check takes two minutes. The Financial Services Register is described by the FCA as a public record of firms, individuals and other bodies that are, or have been, authorised by the FCA or the PRA, and it shows permissions, appointed representatives and clone firm warnings. Look up any adviser who proposes to advise your staff individually, not just your company.

Start with what staff actually use. Take-up data on the current benefits, and a short survey, will usually reveal that two or three items carry the whole value and several others exist because somebody bought them years ago.

Then set the governance: who reviews the scheme and when, who handles member queries, what the renewal cycle is for each insured benefit, and what data goes to each provider. Benefits programmes decay through administration rather than through design.

Communicate at the points where it matters — joining, the annual renewal window, and a life event — rather than with a single annual booklet. A benefit nobody knows about costs exactly as much as one everybody values.

HMRC guidance on GOV.UK describes a salary sacrifice arrangement as an agreement to reduce an employee's entitlement to cash pay, usually in return for a non-cash benefit. It states that you set one up by changing the terms of the employee's employment contract, that the employee needs to agree to this change, and that you must alter the contract with each change the employee wants to make.

GOV.UK explains that for non-cash benefits the employer works out the value of the benefit using the higher of the amount of salary given up or the earnings charge under the normal benefit in kind rules, and cautions that exemptions on benefits in kind do not apply to salary sacrifice schemes for most benefits.

GOV.UK lists items that remain exempt from reporting, including payments into pension schemes, employer provided pensions advice, workplace nurseries, bicycles and cycling safety equipment, and legacy childcare voucher and directly contracted childcare arrangements that started on or before 4 October 2018. Sacrifice arrangements also interact with the minimum wage floor, so check the post-sacrifice rate.

GOV.UK states that employers must report expenses and benefits provided to employees or directors to HM Revenue and Customs, and pay tax and National Insurance on them. It gives company cars, health insurance, travel and entertainment expenses and childcare as examples, and notes the rules differ depending on the type of expense or benefit.

That reporting obligation is part of the cost of any benefit and is often left out of the business case. Private medical cover in particular is a taxable benefit for the employee, which affects how it should be communicated as well as how it is reported.

Agree at design stage who handles the reporting: the benefits consultant, the payroll provider or your accountant. Gaps here are found at year end, when they are most expensive to fix.