Since the removal of the default retirement age (DRA) employers cannot (in most circumstances) force the employee to retire at a fixed age. But as the industry was able to secure an exemption from the DRA for insured group life benefits, employers now have to decide:
“Should I provide group life benefits to members of staff over the state pension age?”
If the answer is “YES”, schemes should be designed so that all members of staff over the SPA receive benefits. ‘Extended’ cover for some individuals and not others is no longer possible.
For employers who take this line, Ellipse can provide cover ceasing at a fixed age of 75. There will be no underwriting or actively at work requirements; cover will continue either to age 75 or until the employee retires or leaves the company, whichever comes first.
Thanks to the exemption for group risk, if the employer decides the answer is “NO” we can cover up to age 65 or SPA, whichever comes later. Cover can then only be extended for specific members if they undergo full underwriting.
If you have existing clients with us, they need to decide if their answer to the question above is “Yes” or “No” when their schemes come up for review – we can of course look at any schemes with members already close to existing cover cease ages before then.
Along with my other colleagues in the Distribution team, I would be happy to field any queries you might have around the impact of the removal of the DRA on your clients.
