Pensions  

Lighthouse adds to master trust

Lighthouse adds to master trust

Employers who opted for the Lighthouse Pensions Trust as their auto-enrolment proposition can provide death-in-service life assurance cover for their employees, Malcolm Streatfield has announced.

The group’s chief executive said the master trust, which is underwritten by Zurich, covers employees aged between 16 and 65 for the same cost for each benefit regardless of age, gender, location or pre-existing medical conditions.

Fee tariffs on the master trust have also been streamlined to make it cost-effective and easier for small to medium enterprises to stage AE-compliant pension schemes, which Mr Streatfield said would help advisers guide their SME clients through the process at a fixed cost.

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“The launch of the Lighthouse Life Trust is part of the group’s strategic workplace solutions development to provide smaller and medium-sized employers with a straightforward ‘one-stop shop’ for all work-related benefits,” he added.

Iain Stewart Black, Zurich Life’s head of corporate, said: “Most of the 1.3m employers still to stage in the next three years will, at best, only have limited access to group life cover. The Lighthouse Life Trust will give employers, who use the associated Lighthouse Pensions Trust, straightforward access to valuable group life cover.”

Roger Sanders, managing director of Lighthouse Group employee benefits, said: “This is great news for employers who never thought they could afford to insure their staff or were put off by the complexity of the paper work and with having to deal with Revenue & Customs.”

According to the latest figures from the Association of British Insurers, there are only 19.7m individual life policies in force out of a total working age population of 38m, and only 7.9m of the 24m employees in the private sector have death-in-service life cover.

Many death-in-service policies are linked to a company pension.

For most employees, death-in-service benefit usually pays out a tax-free lump sum if death occurs while employed by the firm.

Industry View

Steve Goddard, managing director of Surrey-based Perry Consulting, said: “We believe there is a market for master trusts as they offer a strong governance regime, a strong trustee board and independent committees.

“Bolt-ons such as death-in-service are good but the bigger question is the commitment to market, so I welcome Lighthouse’s Master Trust but it must have the AAF02/07 assurance framework for master trusts which shows commitment to the market. Master Trusts such as Salvus get a lot of business from the IFA community because they accept all cases and guarantee terms.”