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Preferred Compensation Plan

Finding and keeping the people you need to take your business to new heights!

In your business, you probably have employees who do the unusual, think creatively and do more than is expected of them. Employees like these are vital to the future of small and medium businesses. If your company is to grow and be successful, you need to find and keep experienced and talented staff members. We all know compensation is one of the first things potential employees consider when looking for a position. What does your compensation package say about your company?

After all, employees equate compensation with their value to the company and compensation packages can be linked to recruitment, retention, motivation and performance. Very often, creative compensation alternatives can be a small business’s competitive advantage and can help motivate employees, develop innovation and go a long way towards retaining skilled staff members.

Life Insurers have developed innovative solutions to help you retain and reward these valuable, business-critical, employees’ Preferred Compensation.

Preferred Compensation Solution - Retaining employees and your competitive edge!

How does it work?

  • It provides funding for increased salaries
  • There is a service agreement between you and the employee:
  • You will pay the employee an increased salary
  • The employee will invest this in an endowment policy and cede it to you
  • If the employee remains with your company for a specified time, the cession is cancelled and the employee has access to the full amount of the policy

How will it benefit your company?

  • The increased salary acts as an incentive to the employee to stay with your company
  • You may use this as motivation for the employee to stay
  • The increased salary is tax-deductible for your company
  • The employee does pay tax on the increased salary, but the payout from the policy is tax-free
  • Pro-active steps to retain highly skilled staff in a fair and tax-efficient way
  • Employees feel appreciated, and if they adhere to the terms of the agreement, it means extra cash in their pockets