Staff must know risks of shares

Employers must explain the risks as well as the benefits of new employee
share plans to avoid disappointment, warns research by Towers Perrin.

At least one million staff will be offered the chance to invest in their
company on a tax-favoured basis, according to the report.

The survey of 66 major employers reveals that 98 per cent are currently
designing share plans and intend to launch them within the next three to 12
months.

Mark Childs, global head of compensation at Fidelity Investments, warns that
HR departments will have to explain the negatives as well as the positives.

He said, "The key thing about the new plan, which is different from
share save schemes, is the investment risk employees will take on. Under the
new model, the employees carry the risk and if HR departments fail to report
the risks and benefits then they will be at fault."

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