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Canada Life Limited

• our clients by the quality of products and services we provide
• our distribution partners by the trust and valued relationships we maintain with them
• our staff by their opportunities to learn and to grow and to feel valued
• our shareholders by the superior rate of return we generate
• and the communities where we live and work, by the footprint we leave as corporate citizens and as valued volunteers.
  

 * highest rating available

• Lump Sum
  Up to 4 times a members salary.
• Death in service Pension
  A pension of up to 4/9ths a members salary. This can be paid to the members financial dependants. The pension can also escalate each year to offset the impact of inflation.

Income protection benefits
This is the next type of benefit insured after death in service benefits.

The commonest benefit is 75% salary less long term state incapacity benefit, with a deferred period of 28 weeks to integrate with State benefits, based on an Own occupation definition of disability.

Other types of benefit available include Net Pay and benefits fully or partially integrated with State benefits. The maximum benefit insured is usually 75% salary less the long-term state incapacity benefit.

It is also possible to have escalating benefits and insure pension scheme contributions and employers national insurance contributions. Other deferred periods and disability definitions are also possible.

Critical illness benefits
This is a relatively new benefit to the market and is less frequently insured.

Benefits are relatively low, in the region of once or twice salary, or perhaps a fixed amount of around £20,000 per member.

There is often a set of around 6 core critical illnesses to which additional illnesses can be insured at additional cost. A members children and spouse can also be insured.

Pensions Simplification

• The many existing sets of rules governing the taxation of pensions were replaced with a single, universal regime.
• For the first time, everyone is able to save in more than one pension scheme at the same time.
• There is no limit on the amount of money an individual can save in a pension scheme or the number of pension schemes they can save in - although there are some limits on the amount of tax relief they can get.
• Tax relief is available on contributions up to 100% of annual earnings (up to an annual allowance set at GBP 215,000).
• Even if an individual is not a taxpayer they can still get tax relief on pension contributions. An individual can put in up to GBP 2,808 in any one tax year and the Government will top this up with another GBP 792 - giving total pension savings with tax relief of GBP 3,600 per year.
• A-Day introduced flexible retirement, allowing people in occupational pension schemes to continue working while drawing their pension, where the scheme rules allow it.
• If the scheme rules allow, an individual can take up to 25% of their pension fund as a tax free lump sum.
• If an individuals pension pot is more than the "Lifetime Allowance" when they come to take their pension they may be subject to a tax charge at that time. But this will only apply if their total pension savings are in excess of GBP 1.5million from 6 April 2006 (rising to GBP 1.8m by 2010/11 and reviewed thereafter).
• Those individuals with larger pension pots at A-Day will be able to protect their funds from the Lifetime Allowance Charge by completing and submitting the appropriate form to HMRC. They have three years from A-Day to do this.
• The rules on when an individual can take their pension changed. From 6 April 2010 an individual will not be able to take a pension before they are 55. There are a couple of exceptions: they will still be able to retire early due to poor health, and if they have the right to retire before 50 at 6 April 2006, that right may be protected.

http://www.hmrc.gov.uk/pensionschemes/pts.htm

Age Discrimination

The Employment Equality (Age) Regulations 2006 came into force on 1st October 2006. The regulations apply to:

• Employers
• Private and public sector vocational training providers
• Trade unions
• Professional organisations
• Employer organisations
• Trustees and managers of occupational pension schemes

The regulations cover:

• Recruitment
• Terms and conditions
• Promotions
• Transfers
• Dismissals
• Training

They do not cover the provision of goods and services. Therefore, the provision of insurance is outside of the regulations. The provision of employee benefits by an employer is subject to the regulations, as these form part of an employees terms and conditions.

The regulations prohibit:
Unjustified direct and indirect discrimination, harassment and victimisation on the grounds of age. In the following limited circumstances it is not unlawful to treat people differently on the grounds of age:

• If there is an objective justification for treating people differently.
• Where an individual is older than, or within six months of, the employers normal retirement age, or 65 if the employer doesnt have one, there is a specific exemption allowing employers to refuse to recruit that individual.
• If the discrimination is covered by one of the exceptions or exemptions given in the regulations.
• If there is a genuine occupational requirement that a person must be of a certain age.

The objective justification test will not be easy to demonstrate and different treatment on the grounds of age will only be possible for exceptional reasons. Discrimination will only be justified if it is a proportionate means of achieving a legitimate aim.

Key exemptions in relation to employee benefits:

• Length of service
  An employer can apply a service qualification period for entitlement to any benefit of up to five years. Longer lengths of service are only allowed in limited circumstances, for example if this fulfils a legitimate business need.
• Retirement age
  The regulations set a default retirement age of 65, which will be reviewed in 2011. This means that an employer can retire employees or set a normal retirement age (NRA) at or above age 65, but retirements or retirement ages below age 65 will need to be objectively justified. Employees will have the right to request to continue working beyond their NRA and the employer has a duty to consider such requests.
• Life assurance cover
  If an employee retires early due to ill health, the employer may continue to provide life assurance cover for that individual. Life cover can cease at the NRA at which the employee would have retired had he not fallen ill, or age 65 if there is no NRA.
• Occupational pension schemes
  The regulations allow a number of exemptions for occupational pension schemes.

http://www.dti.gov.uk/employment/discrimination/age-discrimination

Pensions Bill

The Pensions Bill published in November 2006 contains measures to reform the State Pension, establish a delivery authority for personal accounts, and some simplification of private pensions.
In summary these measures are:

• Making the basic State Pension more generous by restoring the link with earnings;
• Increasing the number of people entitled to a full basic State Pension by reducing the number of years it takes to build a full basic State Pension from 39 years for women and 44 years for men, to 30 years for everyone who reaches State Pension age from 6 April 2010;
• Making it easier for parents and carers to build a State Pension;
• Simplifying and improving access to the State Second Pension;
• Raising the State Pension age over time from 2024 to reflect increasing longevity, supporting extending working lives;
• Establishing a delivery authority to start the process for delivering personal accounts; and
• Streamlining regulation of private pensions, making it easier for people to plan and save.

http://www.dwp.gov.uk/pensionsreform

Welfare Reform Bill

• During 2006, the Welfare Reform Bill was introduced into Parliament, proposing major reform of incapacity benefits, housing benefit reforms and other measures to amend the current benefit system to meet the UK governments aspiration of getting a million more disabled people into work.
• Incapacity Benefit and Income Support, where paid on the grounds of incapacity for work, will be replaced with a new benefit called 'Employment and Support Allowance' (ESA).
• ESA will be paid at two rates; a work-related activity component for people judged able to move towards work and a Support component for people judged unable to work.
• The work-related activity component for people judged able to move towards work will be paid at a higher rate than the current long-term rate of Incapacity Benefit. However, claimants will have to undertake compulsory work-focused interviews or risk losing benefit. These changes will affect new claimants from 2008.
• Only those people with "the most severe disabilities and health conditions", who are assessed as unable to work, will not be expected to engage in work-focused activity (although they will be given the opportunity to if they wish). This group will receive the Support component of ESA, to be paid at a higher rate than both the current long-term rate of Incapacity Benefit and the work-related activity component.
• The current test for getting Incapacity Benefit, the Personal Capability Assessment (PCA), will be changed so that it identifies the capacity that people have to move towards work, rather than just looking at their incapacity to work, as it does now.
• As well as the PCA, there will be a new assessment called the work-focused health-related assessment. This will take place after the PCA (for people judged able to move towards work) and will look at what skills and abilities the claimant has, as well as identifying equipment or adaptations that would help them move towards work.
• After this claimants will be expected to produce action plans setting out the work-related activity (training, courses, rehabilitation or voluntary work) that they will undertake. The Bill gives the government powers to make it compulsory in the future to undertake this activity.

http://www.dwp.gov.uk/welfarereform

This information is based on current HMRC legislation which may be altered and can depend on the individual financial circumstances of the client.