Employee Benefit Trusts
At this day and age, the job market has become increasingly competitive, with the consequence that retaining key staff has become a high priority for employers generally. It has therefore become vital for businesses not only to recruit but also to retain the right employees. As a result it is becoming more common for employers to grant certain added benefits to their employees over and above their salary, in a bid to increase employee retention. Employee Benefit Trusts offer such benefits may take various forms including share option/share award schemes and reward/bonus schemes.
Trusts can serve as the ideal tool to implement such employee benefit schemes, no matter the form which these schemes may take. The flexibility of a Trust arrangement allows employers to design their bespoke employee benefit scheme for the benefit of their employees, based on the criteria which they desire.
Typically an Employee Benefit Trust would hold the relevant assets (be they shares, a sum of money, or any other property), which are to constitute the benefit which is to be granted to key employees, which will benefit as outlined by the employer in accordance with the terms of the employee benefit Trust and scheme, e.g. depending on profits made, results of a performance review, duration of employment, or the combination of a number of criteria
Some of the benefits of using an Employee Benefit Trust are the following:
- Security and peace of mind for the Employee as the Trustees will hold the relevant assets which are to constitute the relevant benefit, as a separate patrimony distinct from that of the employer;
- Separate Governance of the Trust from the Employer Company itself;
- Class of Beneficiaries of the Trust may be as wide or as narrow as the Employer Company desires;
- The relevant assets will be held and managed by Professional Trustees for the benefit of key employees as beneficiaries, in accordance with the terms of the relevant Employee Benefit Scheme;
- When the Trust assets consists of a sum of money this can be invested in accordance with the terms of the Trust and/or the scheme with the main scope of increasing it in value, for the benefit of the Beneficiaries;
We learn about your needs
We design a solution
We implement the plan
We become your Partners