Generate savings through severance, while fulfilling your promise to employees
When an organization faces the difficult decision of separating staff due to shifting goals, financial expectations, a major disruption like the COVID-19 pandemic or any other reason, it’s not easy for anyone. But an expertly constructed, tax advantaged severance solution can help organizations save money, while delivering 100% of base pay during the severance period.
How it works
Through the use of a Supplemental Unemployment Benefit (SUB) Plan and Trust, organizations eliminate FICA taxes, creating tax exempt benefits for former U.S. based employees while simultaneously reducing tax liabilities for US employers, resulting in:
- More equitable benefits across the population
- Reduced windfall payments
- Up to 40% savings for organizations
Reduce your administrative burden and redirect resources
Conduent’s Severance Solution is a fully outsourced service that allows employers to redirect severance resources in higher value ways — from increasing COBRA subsidies and providing outplacement services to extending severance payments for those who remain unemployed. The bottom line is more cash on hand to fund mission-critical expenses.
Turnkey services make plan management easy
We combine the expertise of compliance consultants, benefit advisors, administrators, customer care representatives, and technology specialists who will work to create a solution specific to your organization’s needs. Count on our experience and technology to make difficult transitions easier.
Design and manage plan
Educate former employees
Coordinate with payroll and HCM systems
IVR, website and customer service center
Support state and federal guidelines
Full Separation Administration
End-to-end management of the separation and/or furlough process
Avoid double payments, and stop payments on time
Severance payments plus state unemployment benefits can result in former employees receiving up to 150% of base pay in some states. Through a SUB Plan, an employer’s severance payment obligation can integrate with state unemployment insurance benefits to avoid double-paying former employees.
In addition, a SUB Plan provides proper coordination to reduce or stop payments when a former employee finds new employment or no longer needs salary replacement.
Key program advantages
- Tax savings for employer and employee
- Elimination of overpayments
- Significant cash savings
- Cash flow for new programs and/or enhanced benefits
- Greater value to shareholders
- Reduced administrative burden
- More personalized support for former employees