Attracting and retaining good staff can be the difference between success and mediocrity making it essential to have effective HR strategies.
Employers often provide additional employment benefits, such as insurance, where the cost per unit of insurance benefits is generally less expensive if insurance is arranged as part of a group scheme rather than individually to staff.
Belvest can advise on how best to fund the cost of group schemes by considering an individual company’s unique needs, tax situation and cash flow.
Group Medical Schemes
Medical costs are expensive and very often come when least expected. Employers want their staff in good physical condition making visits to health care professionals essential. Medical insurance policies may cover a variety of costs, ranging from a local doctor visit to emergency evacuation, but more than this, insurance also provides peace of mind for staff, so that they know that if something does happen, they are covered, even if it is just the flu.
The benefits of medical plans vary greatly, as do their costs, and claim payment method. Belvest is experienced in tailoring the right group medical scheme for a broad range of companies and their needs.
Group Life, Critical Illness
Like group medical insurance, other insurance such as life, critical illness and disability insurances are cost effective when grouped and provide the insured with reassurance and peace of mind. Whilst employee and companies are generally familiar with life and disability insurance, critical illness insurance is less understood. Critical illness insurance pays out for life-threatening ailments including (but not limited to) cancer, heart attacks and strokes. Statistically, 25% of us will experience a critical illness during our working lives; fortunately, most of us will survive. So Critical Illness cover is needed, not because you are going to die but because you are likely to live.
Many employers provide group life coverage; fewer however provide critical illness coverage, giving your company an opportunity to differentiate itself from other employers. Critical illness coverage need not be expensive; We are experienced in ensuring that the costs of group schemes remain within your budget.
Mandatory Provident Fund
The Mandatory Provident Fund (MPF) contributes an important role towards the retirement security of Hong Kong’s working population. Not only is Hong Kong’s population ageing (28 percent will be over 65 by the year 2039) but people are living longer and looking forward to longer periods in retirement. MPF, with its taxed advantaged contributions, along with your personal investments and insurances, is a vital component of an overall retirement solution.
For employers, this gives rise to a number of questions:
- What happens if an employee requests an alternative MPF Scheme?
- How can I manage employee questions?
- How can I make sense of the mayhem of different provider choices?
- How much more paper work will I have to do?
- Will MPF increase my costs?
- Is my MPF Scheme competitive in the current market place?
What happens if a co-owner becomes disabled or passes away and their will or trust passes their shares to another person, such as their partner, or even a complete stranger? This new person may end up on your board of directors, may not add much value, yet drain company profits and take income or dividends. Usually this other party does not particularly want the shares; however, they do need the income. Often, the other person would welcome the cash equivalent, while in reality, you want to retain the control and value of the company.
In such cases a Buy-Sell agreement can work to your advantage. This is a binding contract between you and your co-owners that stipulates when an owner can sell their interest, who can buy an interest and what price will be paid for that interest.
Other than borrowing money, selling assets or using cash, an insurance policy can be a cost effective and preferred solution. Its premium is normally a small percentage of the comparable costs of the other funding strategies and its benefits can be controlled, through trusts or various vehicles, on behalf of all parties. Such a scheme is not only cost effective, but also provides needed funds on time. Life insurance proceeds are tax-free and the company can re-purchase shares in pre-tax dollars.
Business continuation planning is the process of identifying risks that may impair your business, such as the death or disability of a key employee or owner – and adopting risk management strategies to minimize, eliminate or transfer these risks.
A business usually represents a source of current income for many business owners; the value of the business through a sale usually represents a primary source of income in retirement. Business continuation strategies are therefore critical.
Key Persons Insurance
While most business owners understand the need to protect against unforeseeable risks related to their capital assets – fire and theft coverage being examples – risks relating to another key asset, human capital, are often overlooked.
Key person insurance protects a business from the adverse effects of losing a Key Person through death, total and permanent disablement, or trauma or critical illness. Key Person insurance is often required by investors in a business when one or more individual people are important to the success of the venture. In other words, it is critical when the investors realize that the death or disability of a Key Person could effectively destroy the value of their investment.
Under Key Person insurance, if that Key Person dies or becomes disabled, the corporation can receive the proceeds as the beneficiary of the insurance policy.
The funds are then available to the business, which can use the funds to overcome the loss of the services of the Key Person, or to distribute to investors upon the dissolution of the corporation.
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