Here to help you understand frequently used terms in reward and employee benefits
The annual period in which employees may choose to make changes to their benefits package for the next scheme year.
In 2008 the Pensions Act stated that between October 2012 and February 2018 all employers will have to automatically enrol eligible employees into a qualifying pension scheme. As a company you’ll get a ‘staging date’ which explains when you have to start auto-enrolling employees.
Benefit cover level
Many benefits offer coverage for employee only, employee and partner, employee and children or employee and family.
This refers to the amount of employees that select a benefit, or can be used to describe how your benefit offering if performing overall.
Communications relate to the exchange of information with your employees. Communications can come in many forms - offline, online or face to face – and play a crucial part in employee engagement.
Data security is about keeping employees’ personal and financial data safe. It is an important consideration when choosing a benefit provider or administrator.
A person or persons, including your legal spouse and children (up to the specific age limit set by your plan), who are eligible for benefit coverage.
The rules under a specific benefit program that determine who is eligible for coverage (employees and dependants) and when qualified participants can enroll in the options available to them.
Also known as flexible or online benefits, an employee benefits scheme allows employees to pick the benefits they want or need for the scheme year from a range of options offered by their employer.
Employee discounts and cashback
Available as discount codes or reloadable cards that can be used in stores and online, with the added benefit of cashback or redeemable points, employee discounts and cashback make a popular addition to your scheme, giving your employees the flexibility to pick and choose what they use, and when.
Engage for Success states that “employee engagement is a workplace approach designed to ensure that employees are committed to their organisation’s goals and values, motivated to contribute to organisational success, and are able at the same time to enhance their own sense of well-being.”
A flex fund is an amount of money, often a set percentage of an employee’s salary or monetary amount, that can be used to spend on selected benefits or can sometimes be taken as cash.
Significant events (such as marriage, birth, adoption, divorce, and death) that create major changes in a person’s life. A qualifying life event change triggers a non-annual enrolment. When one of these events occurs, employees can review and make appropriate changes to limited elements of their current benefits package, subject to the individual benefit rules.
Return on investment (ROI)
A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. For example how a particular benefit is performing, or the scheme as a whole.
HMRC defines salary sacrifice as “an agreement between an employer and an employee to change the terms of the employment contract to reduce the employee’s entitlement to cash pay. This sacrifice of cash entitlement is usually made in return for some form of non-cash benefit.
Salary sacrifice can be financially beneficial for both employer and employee. For example, when part of an employee’s gross salary shifts from cash – on which tax and National Insurance contributions (NICs) are due – to non-cash benefits that are wholly or partially exempt.”
Single sign on (SSO)
SSO allows employees to access multiple applications using one set of logon details.
Total reward statements
A total reward statement (TRS) brings together an employee’s complete cash remuneration with their benefits and details the overall value of their total reward package. It highlights all the extras that employees are receiving that they don’t necessarily see in their bank account at the end of a pay period.
Optional employee benefits, discounts or cashbacks set up by the employer, but usually paid for by employees. These benefits are typically available with a special group rate or discount, making them cost-effective.