If you like a challenge, then 2011 is going to be your year. Reward managers of all disciplines are facing months of implementing new plans and rules across a variety of benefits in order to comply with, or mitigate, incoming tax and legislation changes. This year will not be for the workshy or cowards.
This month sees the VAT increase (as if you had not already noticed), and April will bring in the capping of tax-free pension contributions to £50,000 a year (but until then beware of antiforestalling rules still left over from now-defunct pension tax changes for high earners – see page 9), the rise in employee national insurance and the capping of the tax-free amount on childcare vouchers to 20% (but if higher-rate taxpayers sign up before April, they can still benefit from current, bigger tax breaks).
The default retirement age will be officially scrapped from October, but it will affect employers from April onwards because of the need to give staff six months’ notice if you want to retire them. Again, act now if you need to, or hold your peace.
Very large employers need to be some way down the line in preparing for the 2012 pension changes, although anyone with at least 500 staff should probably also be gearing up for complying in 2013.
These are just the most fundamental changes. Those operating in the financial services sector are grappling with specific bonus rules, while anyone dealing with executive reward has to understand the interplay between the disciplines of shares, pensions and pay.
In this environment, I would challenge anyone to call a job in benefits dull. In fact, I expect 2011 to be a year of great innovation for many reward managers. Already, we are reporting this month on how employers have been reviving home computer schemes, using new products to keep bikes for work on the road, and starting to offer corporate individual savings plans for staff.
As always, Employee Benefits will keep you up to speed with market trends in order to help you in your work, whether on our website, at our events (see page 12) or in the magazine.
I wish you all a prosperous and successful new year.
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