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Lump Sum Allowances Efficient Approach Guide

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9 Most organiza ons today rely on some form of a lump sum for certain reloca on benefits. This allows them to control costs while maintaining compe ve posi ons for a rac ng and retaining talent. With the passage of the Tax Cuts and Jobs Act, this number has grown. When ins tu ng a lump sum allowance program, the key decision is to determine the right approach – a fixed amount program versus a transferee-specific program. For many organiza ons, a fixed amount program is the first approach implemented. The program is likely to be designed and managed by the organiza on's staff. This approach appears simple at the outset. However, the increased accountability, varied geographic costs and growing complexity of reloca on processes increasingly limit the sustainability of fixed amount programs. As a result, an increasing number of organiza ons are switching to a transferee-specific program. Policy-driven and established with the help of industry experts, a transferee-specific lump sum program offers several dis nct advantages, including: Cost control through be er policy adherence and fewer excep ons Reduced administra ve burden (now more than ever since final move expenses and household goods shipments are taxable) Flexibility for each employee to use funds specific to their needs Equity and fairness across all employees SUMMARY A transferee- specific lump sum program offers SEVERAL DISTINCT ADVANTAGES.

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