The Benefit Audit Service

Most employers use a mixture of benefits and salary to remunerate their staff. While salary has obvious attractions benefits can be more tax efficient and, if correctly targeted and communicated, can often create a greater perception of value than their cost.

Like all areas of employment though there are potential pitfalls in the deployment of benefits strategies. Such pitfalls often go unnoticed as the detail of benefit arrangements are rarely explored by company auditors; however, the potential liabilities can be significant.

Lighthouse Group Employee Benefits provide a fast and efficient Benefits Audit Service which can quickly help you identify any potential issues your business may be facing and we will then suggest effective practical solutions.

Some brief examples of typical problems we encounter;

• Group Life Assurance schemes;
  • It is not uncommon to find individual or indeed sometimes whole groups, of employees missed from the data sent to insurers. If the risk is not correctly described to the insurer then employees may not be covered. A typical death claim value will be around £100,000 so being uninsured for just a single member can create very real liabilities.
  • o Generally group schemes require no medical details for members with benefits below a certain level (the ‘free cover limit’). Member exceeding this level will be asked to supply medical evidence, perhaps even undertake medicals. If they do not do this the insurer will not provide cover beyond the free cover level, you will be left self-insuring this element. As the people likely to be effected by this are the highest earners the liabilities can be significant.
• Pensions
  • We commonly find no documentary evidence that an employee has been offered but declined to join an employer scheme. This leaves the employer exposed to the employee saying they were never told and asking for backdated contributions and lost investment growth.
  • It is common to see that the employer has failed to revise salary related pension contributions following promotional or annual inflationary pay rises. Similarly we often see situations where increases in pension contributions have been reflected in salary but the employer has failed to make corresponding changes to the payments they make to the provider. In addition to lost investment growth compensation this can all result in fines of up to £50k being levied.

How can Lighthouse Group Employee Benefits help?

We have developed a concise questionnaire which will take us no more than 20 to 30 minutes to cover with you. This will highlight any areas which might require further attention. These snapshots are taken from our Benefits Audit Questionnaire. As you can see its just two pages long but it could save you significant money!!If you would like more details then please do contact Roger Sanders in LighthouseGEB on 020 7065 5652, email roger.sanders@lighthousegroup.plc.uk