Sep 19, 2007
by KEVIN J. HOAR of MetLife
Whether you are the head of a small, family-owned business or a large corporation, finding the right employees is becoming more and more challenging. Nowadays, it’s not uncommon for several businesses to compete for the services of skilled and talented individuals in the same manner as they would compete for a customer’s business. So, how can your business set itself apart from your competitors and attract high quality, “key” individuals?
Potential employees have a certain level of expectation concerning benefits. When evaluating each prospective employer, they may take a first look at what core benefits are usually at the top of the list:
• Health Insurance
• Qualified Plan
• Flexibility of Schedule and
• Working Environment.
There are a variety of additional benefits that can set one employer apart from another when attracting new executive-level employees. However, some businesses may be concerned that Internal Revenue Service (IRS) discrimination rules may require the inclusion of such benefits in already existing employee benefit packages. Fortunately, there are some benefits that allow employers to be selective.
Split Dollar Arrangements
The split dollar arrangement is a creative method whereby the employer uses business dollars to provide high quality permanent life insurance for a select employee. Generally, it also ensures the employer will be repaid any premiums paid on the employee’s behalf or the cash surrender value of the policy. The employee benefits by acquiring additional life insurance protection.
Executive Bonus Plans
This benefit allows the employer to pay a selected employee a compensation bonus that is deductible to the corporation. The bonus is then used by the employee to pay the premium of a life insurance policy insuring the life of the employee. The policy is owned by the employee.
Disability Income Insurance
A growing concern for many individuals is how they will maintain their financial and personal lifestyle in the event of a debilitating accident or illness. In addition, group disability plans offer only minimal amounts of coverage. Therefore, individual disability income insurance paid by the employer is fast gaining popularity as a much sought after benefit by prospective employees.
These benefits are funded entirely by the employee, generally through payroll deductions. Typically, a menu of benefit options (i.e. dental insurance, disability income insurance, etc.) is given to employees in addition to core benefits. Employees then pay for whichever benefit(s) fit their respective financial needs. Because voluntary benefits are offered in a group setting, costs are generally more affordable than if the employee were to purchase similar benefits individually.
In today’s work world, business owners are quickly realizing that salary alone is no longer the only factor highly-skilled employees are seeking. Just as you are shopping for the “right” employee, they are shopping for the “right” employer. They are looking for the best combination of salary and benefits that is right for their situation. Therefore, employers need to offer a creative benefits package that sets them apart from the competition.
This article is for general information only and is not intended to provide specific advice or recommendations for any individual. You should consult with your attorney, accountant or advisor with regard to your own individual situation.
The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of MetLife products and services. You should seek advice based on your particular circumstances from an independent tax advisor.
Like most insurance policies, MetLife policies contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your representative will be glad to provide you with costs and complete details.
This article appears courtesy of Kevin J. Hoar. Kevin is a registered representative offering securities through MetLife affiliated broker/dealers including Metropolitan Life Insurance Company (member NASD) or MetLife Securities, Inc. (member NASD/SIPC). Insurance and annuities offered through Metropolitan Life Insurance Company. He focuses on meeting the individual insurance and financial services needs of people in the business market. You can reach Kevin J. Hoar at the office at 62930 O.B. Riley Rd., Bend, OR 97701- 541/ 617-0509.