With a group pension insurance for a specific group or even all personnel, you can reward and commit your employees. Entrepreneur’s pension insurance ensures your livelihood even after your career. You can also take out life insurance for yourself or your personnel.
Committing the key employees to the company can be the lifeline of its future. If a key employee resigns, the company might lose valuable skills that the business is built on. The problem not only concerns the management, but also the specialists, such as top sellers. One good salesperson can bring in as many sales as several average sellers.
A pension may feel like a distant matter for young key employees, but it does concern them as well. Young specialists appreciate the ease of pension insurance, and it is a good way to commit your employees in all fields of business. Voluntary pension insurance is used by health sector operators, law firms, architecture firms, advertising agencies, machinery contractors, and transport companies, for example.
We have listed five reasons why you should commit your employees to the company with a voluntary pension insurance.
1. Commits employees to the business for a long time
Performance-based pay encourages the employee to work hard. Performance-based pay is usually paid once a year, and the employee might resign and change jobs right after it has been paid. This type of remuneration has no committing impact, only one year at a time.
Voluntary pension insurance enables your employees to accrue income in funds. Savings are paid out in the form of supplementary pension when the employee reaches retirement age. Only some 10 per cent of Finnish companies use group pension insurance. Your competitor is unlikely to offer the same type of remuneration, so the employee stops receiving supplementary pension if they decide to change jobs.
2. Provides a buffer in case of resignation
A company can decide whether to grant the supplementary pension accrued by the insurance to the employee or return the funds to the company when an employee resigns.
If you have not agreed on an irrevocable beneficiary clause to the voluntary pension insurance, or if the right to paid-up policies concerning the benefit has been limited, the company can surrender the employee’s pension insurance assets when the employee resigns. The company can use the recovered assets to recruit a new employee, for example.
3. Has no impact on the company’s ownership
A common way to commit corporate management is to offer an opportunity to subscribe for the company’s shares for a pre-determined price over a specific period of time. The stock option creates a strong economic and mental bond to the company: the manager receives a part of the company. The flip side is that the relative ownership share of the other shareholders decreases.
Voluntary pension insurance creates a long-term bond to the business without impacting the company’s ownership. Therefore, you can offer voluntary pension insurance for a large group of people without needing to worry that your share of ownership will be reduced due to recruitment.
4. Tax deductible
Voluntary pension insurance is a type of remuneration supported by taxation. A company can deduct the pension insurance premiums in taxation.
The employee receives the sum on a gross basis in their pension insurance, and the returns from funds are exempt from taxes. The pension is considered earned income only when the retired employee draws their pension.
5. Makes retirement more flexible for the employer
Pension insurance is a flexible way to commit employees. For example, you can determine the age of retirement flexibly. Voluntary pension insurance provides the manager with an opportunity to retire or bring the date of retirement forward.
The supplementary pension from the insurance gives the manager an opportunity to retire at the age of 60, for example, either entirely or in stages based on their capacity for work.
For the company, this provides an opportunity to transfer duties flexibly from the manager to their successor. The recruitment of the successor can start well before the legal age of retirement is reached.
What kind of voluntary pension insurance is suitable for your business?
Voluntary pension insurance is an investment product. There are two types of voluntary pension insurance policies for companies: corporate and group pension insurance. An entrepreneur can also take out life insurance for themselves or their employees.
The corporate pension insurance is designed for self-employed persons and companies that want to flexibly supplement the statutory social security for entrepreneurs, the YEL insurance. Corporate pension insurance is also suitable for general or limited partnerships that have no employees. Corporate pension insurance is a good way to reward individual employees and make them committed to the business.
Group pension insurance is designed for businesses with employees that want to expand the pension insurance benefit to cover all personnel or a specific group of employees. Group pension insurance is a financially sensible way to reward employees for good work and a long-term way to commit key employees to the business.
Life insurance for entrepreneurs is suitable for you as an entrepreneur, or you can cover your personnel. Life insurance is a good employee benefit that provides security for the employee’s family.
What other insurance policies can make employees more committed?
As for non-life insurance policies, employees definitely appreciate Health Insurance. Health Insurance is a medical expenses insurance that helps the employee receive professional care for issues that impede the ability to work. With Health Insurance, you give your employee an immeasurably valuable benefit in the form of better health.
