Retirement Plans
Incentive plans, such as retirement savings plans and defined benefits plans, are frequently outsourced. The amount of legal and tax reporting and recording is immense when it comes to these plans. By outsourcing it to brokerage firms or plan administrators that strictly do employee benefits plans, the company can reduce the amount of time spent on recording. The fee paid to the administrator is less than what it would cost to staff the position. This also limits the liability exposure of the company, now further removed from fiduciary responsibility of incentive plan assets. An HR World whitepaper in 2005, projected that outsourcing for defined contribution plans and benefit plans will continue to increase.
COBRA Administration
COBRA is the temporary health insurance benefits that terminated employees may choose to purchase. The acronym COBRA refers to Consolidated Omnibus Budget Reconciliation Act and requires individuals and companies to follow stringent timelines regarding termination, COBRA benefits packages and implementation. By outsourcing COBRA HR requirements, companies can ensure that updated benefits are being offered with the most competitive pricing through preferred COBRA vendors. Benefits are administered uniformly, reducing employee issues and costs in trying to fix them.
Payroll Services
Once upon a time, payroll was merely writing a check to cover the wages a person earned in a given pay period. Today, payroll requires state and federal taxes along with health and life insurance premiums to be withheld from pay. Assets must also move over from payroll budgets into employee salary-reduced benefits plans, matching programs and other incentive plans offered by employers.
Payroll services do the accounting for companies and work with incentive plan administrators to make sure the right amount of money is being directed to the correct employee account. Payroll companies specialize in taking the funds and distributing them accordingly and then providing HR with the required report for accounting purposes.
by Kay Miranda, Demand Media
Chron.com
