Plan Sponsor is a group or an entity which looks after several benefits to employees in an organization which not only motivates the employees but also make them firm with organization and thus reducing turnover of employees. Benefits may be like
Plan sponsor maybe any Government entity or Private entity or a NGO who partners with service providers and make employees get easy access to the services at low cost. They need to make schemes for employees in such a way that employee gets benefited from it and incurs minimum expenses.
They must give employees a complete detail of the schemes like its features, conditions and benefits and such schemes must abide the guidelines laid down by the government.Usually, Plan sponsors, after establishing any employee benefit schemes, give the task of maintaining them to some third party. Below diagram shows the functions of a Plan Sponsor:
Consider a company ABC Ltd. Assume that ABC Ltd. has partnered with an Insurance Firm and is offering Accidental Insurance Plan to its employees in such a way that employee needs to pay very less amount compared to what if employee had paid for Personal Accidental Insurance Plan. This type of schemes are launched and maintained by entity which is called as Plan Sponsor.