Auto Enrolment - Our Approach
2nd October 2014 - London
What is automatic enrolment?
The Pensions Act 2008 and subsequent regulations mean that all UK-based employers must automatically enrol their eligible employees into a qualifying workplace pension scheme. The phased introduction of automatic enrolment (auto-enrolment) is now being implemented.
How does automatic enrolment impact group risk benefits?
Auto-enrolment is impacting the provision of group risk benefits where membership or benefits are linked to pension scheme membership. There are a number of considerations to take into account when reviewing the risk benefits in light of auto-enrolment from ensuring the correct provision of benefits for all new joiners, to working together to ensure the potential administrative burden of this change is kept to a minimum.
Consideration of Issues
Liaising with both advisers and clients we have been made aware of the key issues and concerns auto-enrolments raises, these are as follows:
- Automatic entry requirements (actively at work conditions)
- Additional data provision (at staging date and/or end of decision period)
- Additional accounting, split accounts.
- Cost uncertainty due to fluctuating membership
- Alteration of current Trust and/or the setting up of new a Trust.
Our Standard Approach
In deciding our approach to dealing with the matters raised by auto-enrolment we have kept the Policyholders' needs at the forefront of our decision making. As such we believe our terms are some of the most straightforward and favourable in the market. These terms are defined below.
- Actively at work - The actively at work provision of the Generali in force Policy will be the actively at work terms that apply for auto-enrolment. Employees meeting the actively at work terms of the Policy are automatically covered up to the scheme free cover limit subject to the in force scheme eligibility conditions.
- Temporary Full Cover - Is provided for employees up to the free cover limit during a maximum decision period of 3 months.
- Adverse Medical Underwriting Decisions - employees who have previously been underwritten and declined or postponed for benefit, or who have been restricted due to non provision of medical evidence will not benefit from the above terms. Previous loadings or special conditions will also continue to apply as usual.
- Data Provision - Membership data will not be required at staging date. Membership data will only be required at the end of the decision period (a maximum of 3 months after the staging date) where the membership, salary roll or total sum assured has varied by 25% or more.
- Rate Guarantee - Existing rates will not be reviewed unless the membership, salary roll or total sum assured varies by 25% or more.
- Accounting - Simplified administration will continue to apply with reconciliation taking place in the following year where membership has altered by less than 25%
- Trust Variations & New Trusts - Generali must be advised of any alterations to existing Trusts to allow updating of Policy Documentation. We must also be made aware, in advance of any new Trust Documentation which will result in the setting up of a New Policy and/or additional categories of cover. Relevant terms and conditions in such instances will be advised on a case by case basis.
Flexibility remains key at times such as these
The terms defined above are our standard terms which have been agreed with the Policyholders' best interests in mind and to ensure ease of administration. However we are happy to discuss alternative arrangements and to agree alternative terms where possible. To discuss alternative options, please contact Tracey Ward, or your dedicated Account Handler.
For further information, please refer to contacts