Significant power now lies with trustees and regulator.
Increase in deficits and consequent increase in employer costs due to market falls and lower gilt yields.
High taxation on any individual building up pension assets in excess of GBP 1.8 million.*
* For 2010–2011 tax year and frozen until 2015–2016.
Medical, Disability and Death Benefits Environment
Medical costs continue to escalate well above salary and retail price inflation (insurers indicate inflation of 9% to 11% per annum), although the long-term estimate is somewhat lower at 6% per annum. Large company-paid plans are dependent on their own experience but on average have lower inflation figures than those indicated by the insurance market. There is ongoing concern by employers about the trend of rising costs for private medical coverage, particularly for high-cost treatments such as oncology.
Premiums paid by employers on behalf of employees (and any dependents) are subject to income tax as a “benefit in kind” at the highest rate of tax paid by the employee.
