Benefits Strategy
| Benefit design | Tax efficiency |
Benefit design
We have considerable experience of advising and implementing benefit strategies for an extensive range of companies. From our experience of advising other companies, we have developed a range of tools and methodologies to assist with analysing and explaining each of the key options. We have strong relationships with all key pensions organisations.
We can help companies consider whether their current pension scheme arrangements remain fit for purpose, and if change is needed, what key elements need to be incorporated in the new design.
Any company reward programme should look to optimise the balance between:
| The needs of the employees | Corporate objectives | Regulatory environment |
|---|---|---|
| Have the characteristics and needs of employees changed since the introduction of the reward programme? For example, employees may now be more mobile between jobs and may place less value on long term savings. | Every company will have a number of objectives in relation to the cost and risk profile of their benefit arrangements; these will also need to align with broader corporate strategies. | Recent changes to taxation and legislation of Irish pensions may mean that current pension arrangements are no longer suitable for some. |
Pensions alternatives
For many employees, traditional pension schemes may no longer be an appropriate or efficient way of saving for their future. While there is no ‘one size fits all’ solution, there are alternatives available.
Deloitte can help you understand the alternatives, their profile, and how other companies are reacting to the reward challenge, and assist with a strategy for dealing with the current and future pensions’ environment.
The choices available range from the simple offer of cash alternatives to more involved solutions. The right pension alternative will depend on alignment with several key factors, including:
- The preference for long term or short term planning
- Whether the organisation is a large employer, small employer or partnership
- Whether immediate or deferred benefits are to be provided to employees
- The requirements for compulsory deferral or performance based rewards
- The international mobility profile of the organisation
Tax efficiency
A tax liability can arise even in respect of simple investments. However, as pension schemes increasingly invest in those assets with the potential for higher returns (such as venture capital funds, hedge funds and derivative contracts), there is an even greater potential for tax liabilities to arise. As a result, tax in pension schemes should not be overlooked as it can provide a very practical means of boosting scheme returns, benefiting companies, pension trustees and scheme members.
We can help companies review their pension scheme arrangements and identify areas where tax exposures have arisen directly or indirectly.
Once this cost has been identified, we can help companies implement solutions to ensure the tax cost is minimised. We can liaise with our tax colleagues to ensure your pensions and investments are as tax efficient as possible.