Loyalty Management Group, the consumer loyalty firm behind the Nectar card, rolled out a cost-neutral tax-efficient flexible benefits programme to its 180 staff in January. Gabrielle de Wardener, HR director, was not faced with any unexpected costs following its implementation, because any extras were covered by savings made by switching its group personal pension (GPP) provider from Standard Life to Legal & General. "Because [the provider] rebroked our pension at the same time, a lot of people moved over to the new pension and therefore they covered the cost of the pension due to the commission received."
She adds employer National Insurance savings from its salary sacrifice pension arrangement also contributed to the cost-neutral implementation of flex, with the firm able to use these to cover provider administration fees. Savings were also reinvested in employee pensions. But De Wardener warns that although it was not the case at Loyalty Management Group, premiums for some healthcare benefits may be affected by the move to flex. There is an argument that employees may only be attracted to a private medical insurance policy if there is a good chance they will claim on it, therefore resulting in an increase in premiums.