Employers must ensure they don’t offend against the age discrimination legislation when offering employee benefits.
This was considered in Swann v GHL Insurance Services. GHL investigated an employee benefits package to improve staff retention. After consultation, GHL offered a fund from which employees could purchase benefits. One element was PMI. Premiums took the employee’s age, gender and claims history into account.
Mrs Swann, aged 51, bought PMI. She discovered that although the fund would cover the premium up to the value of £462.50 per year, the total cost of her premium was £631.56 per year, based on her age and gender. She claimed age discrimination, as the premium for a younger employee would be less costly.
GHL argued that the benefit was their provision of the fund of money, not the PMI scheme itself. In the case of employees with less than five years service, this fund was 5% of the employees’ basic salary and the benefit was not discriminatory as it was not age-related.
The tribunal agreed. GHL’s provision of this benefit was not discriminatory and the company’s motivation for introducing the benefits package was considered more important than whether the legitimate aim in question had been achieved.
This is an encouraging decision for employers, but note that it is only a tribunal case and may not be followed.
You can help by encouraging clients to:
■ keep full records of the reasons for the introduction of a benefits package;
■ take professional advice about what benefits and what kind of package will best meet their aims;
■ carry out a employee survey and consult with the target employees.
EMMA HUBBARD – ACCOUNT EXECUTIVE, CASTLE SUNDBORN LTD
How and when did you start advising on PMI?
I began working in PMI as a sales support administrator in 2002. In February 2005 an exciting opportunity came my way when Castle Sundborn Ltd approached me to assist with the expansion of their healthcare division. I left my current employment to take on this fantastic challenge.
Do you advise on individual/corporate – or both?
Castle Sundborn Ltd was established over 40 years ago and as a result has a substantial client base ranging from individuals and SMEs to large corporate businesses in the UK and overseas. I deal with all types of clients but find the employee benefits area the most challenging and most interesting.
What time does your day start and what time does it end?
If am working in the office then my day starts at 8.30am and ends at 5pm. This is not always the case as I have a personal target of having a clear desk every night. Obviously, when I’m out with clients there are no fixed hours.
Who/what gets you through the day?
Working as part of a team and having an interest in the job. Being faced with new challenges daily. Finally, working closely with our insurer contacts to ensure a good service to clients. If it is a Friday the thought of the weekend always helps.
Do you work with introducers and, if so, how?
We have five registered financial advisers in the company and with their leads and also referrals from our general insurance side I am kept very busy. Unlike many PMI advisers, we do not buy in leads or pay commission to external introducers.
What in your view is the key issue in the PMI market today?
With the increasing number of claims and the escalation of medical inflation, the ability of insurers to retain expenses and therefore annual premium increases to ensure a competitively priced product going forward is very important. In the current economic climate companies and individuals will not accept substantial, if any, premium increases and many will be considering PMI an unaffordable luxury.
How much time do you spend seeing clients?
This part of the job I really enjoy but sadly never enough as the major part of my role is to ensure a high level of service to all clients and this of course means admin time in the office.
Who in the PMI industry do you most admire and why?
My managing director, Anthony Bather, who has 20 years’ experience in selling PMI mainly in the corporate market. He still finds it exciting and challenging and this experience and enthusiasm he has managed to pass on to me. I have learned a lot from him, not least to retain a good sense of humour even in the darkest hour.
What/which PMI product/s do you currently most rate and why?
PruHealth – its attitude to wellbeing offers a positive approach with the opportunity to get involved more closely with clients. For example, it hosts fantastic Vitality days, HR training and employee presentations.
How do you relax?
I enjoy going to the gym, socialising with friends and shopping.