L&G outlines group protection approach to auto-enrolment

L&G outlines group protection approach to auto-enrolment

Diane Buckley, Legal & General

Legal & General has published details over its approach to auto-enrolment when it become comes a legal requirement for companies to operate in October 2012.

When an employer starts auto-enrolment, they need to include all eligible employees who haven’t yet joined the employer’s pension scheme. Legal & General refer to employees who join their employers pension scheme after they’re first eligible to be included, as a late entrant. It is expected there will be many late entrants to the employer’s pension scheme at this time.

Auto-enrolment will affect Group Protection policies where cover is dependent on employees joining the pension scheme. Legal & General has updated their policy terms with auto-enrolment in mind.

Previously Legal & General used different policy terms for Group Protection cover that depended on how late an employee joins the scheme. An employer had to administer these different terms and employees joining more than six months late, had to provide information about their health before they were considered for cover.

Legal & General will now treat all late entrants the same, regardless of when they join the pension scheme. It believes its new terms will allow more entrants to get Group Protection cover without providing information about their health.

The firm was also attempt to keep accounting procedures simple for late entrants when auto-enrolment starts. In most cases, employers will not need to send extra membership data and their accounting procedure will not change.

“Auto-enrolment will have a big impact on employers and we wanted to ensure it was as easy as possible for them to make any changes to their Group Protection policies to simplify cover for their employees,” said Diane Buckley (pictured), managing director, Group Protection at Legal & General.

“The changes to our process means they won’t have to worry about providing additional medical evidence for employees joining late which will reduce administration and their accounting procedures.”