Employers must address the impact on death in service benefits following lifetime allowance (LTA) and pension protection changes according to Aon Employee Benefits.
A survey of 1,162 Aon clients showed 205 out of 448 employers with 100 or more employees had made an active assessment of the death in service implications of this latest legislation.
It found most companies of varying sizes had not taken action, and where they have, there is significant divergence in the approaches adopted.
In all organisations surveyed, less than 25% of respondents (274 out of 1162) had taken steps to address these issues, with inaction being especially high among smaller (sub-100 lives) employers.
Growth in defined contribution (DC) pension pots, the higher level of lump sum assurance cover on offer and the latest reductions to both the LTA and annual allowance meant these implications affected lower earners.
Aon Employee Benefits principal Mark Witte said: "There has been no shortage of pension regulation for employers to get their heads around in recent years and it may be understandable if the life assurance issues have yet to reach the top of the agenda.
"The time has now come for them to review the situation as more of their employees may now fall foul of the latest changes if actions are not taken."
He continued: "Given the implications of inaction, this is an issue that cannot continue to be buried by the seemingly dominant pension agenda.
"In the absence of categoric guidance from HM Revenue and Customs, it is essential that employers fully consider the issues and the insurance options available, before agreeing on an approach that fits in with their over-arching reward principles."
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