Canada Life warns group life insurance schemes of trust deadline
Wed, 16 Feb 2011
Canada Life is warning registered group life insurance schemes of an important deadline which is close at hand and will have an affect on the operation of these policies.

The Finance Act 2004 provided a 5-year transitional period, which comes to an end on 5 April and requires trustees of schemes to ensure there are no unintended benefit increases for scheme members; no unauthorised payments, or un-insured liabilities.

For example, from 5 April, the 'earnings cap' will no longer apply. This could mean that unless specific action has been taken to apply a restriction to members' salaries, their benefits would increase, whether the trustees had intended this or not.

To help clients, Canada Life has produced a dedicated webpage which includes specimen deeds of amendment that amend the provisions of declarations of trust for affected schemes and a webcast concerning the changes. Howard Rayner, group legislation manager at Canada Life, said: "This is an important deadline for Trustees of these schemes and they need to review the way in which their scheme operates, to avoid unintended consequences."
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