FAQ
1. Are we required to fund end of service benefits in advance?
Requirements differ depending on where your company is established and which rules apply to it, and they have been changing. We will confirm what applies to your entity. Separately from any requirement, funding the liability while it accrues is usually the more comfortable way to carry it.
2. What does it cost the company?
Broadly what the obligation was going to cost anyway, spread evenly instead of arriving unannounced. The change is one of timing and predictability rather than a new expense, which is why finance teams tend to warm to it faster than they expect.
3. Can employees contribute their own money?
In many arrangements yes, and it is a popular feature, particularly with staff who have no other structured savings. Employee contributions are usually voluntary and can be started, paused or changed.
4. What happens if an employee leaves early?
Entitlement follows the rules of the scheme and the employee’s statutory position. Anything held above the minimum entitlement can be subject to a vesting schedule if you want length of service to count for something, which is a design decision worth thinking about rather than defaulting.
5. Who chooses how the money is invested?
Usually the employee, from a small range of options, with a default for anyone who would rather not choose. Keeping the range short is deliberate. Too much choice reduces participation and helps nobody.
