Employers should make changes to their group income protection policies following the abolition of the default retirement age and increases in state pension ages, Legal & General is to warn.
The provider, which is holding a financial adviser webinar on Friday, will note 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 not to provide benefits or provide different levels of benefits to employees.
Although an exemption in the regulations means employers are not obliged to provide insured group protection benefits beyond the greater of age 65 and the state pension age, the increase in state pension age could mean there may be a gap between what employers have promised to pay the employees and what they have insured.
Commenting Diane Buckley, Legal & General's Group Protection Managing Director, 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."
