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Warning on group cover

Many employers are considering suspending death-inservice benefits following changes to group policies in the wake of the September 11 attacks, according to Watson Wyatt&#39s latest research.

The consultancy firm is predicting that there will be an increasing emphasis on lump sum payments and a potential reduction in death-in-service cover provision in the future as firms move to cap liabilities.

Watson Wyatt is encouraging employers to review their group death-in-service arr-angements.

It advises firms to consider include spreading death-in-service cover across two insurers, changing the contractual arrangements with employees to guarantee benefits only up to the limits of insurability, and rethinking the way that death-in-service benefits are designed.

Watson Wyatt head of healthcare and risk consulting David Cross says A-Day and pension simplification have forced employers to review the way death-in-service benefits are structured within their companies. He warns that death-in-service pensions are increasingly expensive compared with lump sums as well as being generally less tax efficient under the simplification proposals.

Cross says: “Since 9/11, insurers have typically placed single-event limits of between £50m and £100m. These are significant sums but for companies with large concentrations of employees, there is a risk of a potential shortfall in the event of a catastrophe.”


FMO offers rolling deal for loan advisers until they get authorisation

First Mortgage Options is offering a rolling monthly deal to mortgage brokers who want direct authorisation but fail to get their FSA authorisation by October 31. Your Mortgage Options, the mortgage network within the FMO group, will allow mortgage brokers of any size to operate as authorised representatives on a rolling mon-thly contract until their […]

Trusts move towards open architecture

A new trend towards open architecture is set to sweep through the investment trust sector, says the Association of Investment Trust Companies. It believes increasing numbers of investment trusts will change their structures in a bid to become more competitive. Communications director Annabel Brodie-Smith thinks firms will move to an open architecture structure that allows […]

Merricks fears Public will be confused after depolarisation

Chief financial ombudsman Walter Merricks is concerned about the effects that depolarisation will have on the market and fears it will confuse consumers. Speaking at a round table of IFAs hosted by Money Marketing in London last week, Merricks revealed his concerns about the ability of consumers to be sure about who they can bring […]

Furbs from the madding crowd

Last week, I started to look at possible investments for existing funded unapproved retirement benefit schemes. Given the protected status that these schemes can secure by accepting no further contributions after A-Day, many may well feel this to be valuable. Tax-free payment of lump-sum benefits and inheritance tax freedom on the payment of benefits on […]

Is three a crowd?

The pension versus Isa debate has raged on and off for years. Les Cameron, head of technical at Prudential, asks if three’s a crowd.   I think the debate was arguably settled by pensions freedom when the biggest downside of pensions – limited access and poor death benefits – was fundamentally changed. Total access, albeit with […]


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