During this pandemic it is now clear that Group schemes are an important benefit to have in place for staff, as this allows staff to have cover in place in the case of a claim. Employers may have various options to reduce contribution and/or premium amounts however it should be noted that this must be communicated clearly with the staff and if necessary an amendment to their letter of appointment must be signed to implement the changes.
Reducing salaries – this seems to be the option most employers take, however staff need to be notified that their risk cover reduces
Temporary absence – the rules of the fund will indicate the maximum period that the Employer may indicate staff are off, risk cover and administration fees are still payable during this time.
Reducing contributions – by way of a rule amendment contribution amounts may be effected however the employer can only implement this once the rules have been approved by the FSCA.
Defer payment – the employer and staff can defer payment (subject to a maximum period indicated in the rules of the fund), however once the period is over these contributions will become due, risk cover and administration fees are still payable during this period.
It is important to note that any changes to a fund needs to be approved by the FSCA and communicated clearly with the members of the fund.
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Phone: 011 803 9686