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PMI Health Group is warning businesses that failing to seek professional advice over changes to group life and pension scheme benefits could have serious financial repercussions.
Changes came into force on April 6, following a five-year transitional period, which has seen HM Revenue and Customs (HMRC) replace benefit limits, including Life Assurance salary earning caps. HMRC made the changes to simplify the tax regime.
The move referred to as A-Day when introduced in April 6, 2006 has meant that many schemes need amending to prevent employers offering benefits that are much higher than intended.
Our experiences suggest that the lengthy transitional period resulted in many businesses failing to act immediately, said Mike Blake, PMI Health Group Compliance Director.
With this period now having come to an end, however, those companies that have not sought advice should do so now. A lifetime allowance of 1.5 million for 2011-2012 tax year means this is would be the maximum lump sum payable on an employees death for any uninsured liabilities.
Although the earnings cap restriction has been removed, notional caps can still be used but must be written into scheme rules. Alternatively it is possible to operate with no cap.
To amend scheme documents, employers need a Deed of Amendment and they must advise insurers of changes to risk.
PMI Health Group is the UKs largest independent specialist provider of employee healthcare and risk management services.


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