Employers should be making changes to their group income protection policies following the abolition of the default retirement age and increase in state pension ages.
The increase in state pension ages could leave employers who provide group income protection benefits with financial difficulties if they do not update their policies.
The abolition of the default retirement age will mean that employers can no longer make employees retire at 65. It also means that employers must not use age as a reason to not provide benefits or provide different levels of benefits to employees.
However, an exemption in the new regulations mean that employers are not obliged to provide insured group income protection benefits beyond the greater of age 65 and the state pension age. Consequently the increase in state pension age could mean there may be a gap between what they’ve promised to pay the employees and what they’ve insured under their policy.
Commenting on the risk, Diane Buckley, group protection managing director at Legal & General, said: “It is important that employers are made aware of the consequences the changes to state pension ages will have on their group protection policies. I would urge HR managers and employers to review their policy needs now.”
Printed Copy:
Would you also like to receive CIR Magazine in print?
Data Use:
We will also send you our free daily email newsletters and other relevant communications, which you can opt out of at any time. Thank you.
YOU MIGHT ALSO LIKE