Research amongst employers with up to 49 employees shows 55 per cent would consider offering other benefits when they set up auto-enrolment pensions, equating to almost 600,000 employers.
The research, conducted on behalf of Canada Life Group Insurance, found 71 per cent of employers are receptive to discussions on easily implemented group life options. But 42 per cent said perceived expense is the main reason for not offering group life, with 24 per cent not understanding the product and 17 per cent perceiving it as having a low employee value. The research found 91 per cent of employers thought that Group Life would cost more than 1 per cent of salaries, with 9 per cent assuming the cost would be more than 5 per cent of salaries.
From June, companies with 49 or fewer employees will begin automatically enrolling them into workplace pensions but 29 per cent have not started preparing for this. Of this group, 18 per cent do not currently offer group life assurance to any members of their staff.
Of small businesses that already offer group life cover, the most popular reason for doing so is that it is an attractive benefit for employees – cited by 33 per cent, with 24 per cent offering it to protect or support their employees and 20 per cent saying it fits with their paternalistic or caring company culture.
Canada Life Group Insurance marketing director Paul Avis says: “After a year of undertaking and reviewing SME research we are 100 per cent confident that a simple, inexpensive level of group life cover, considered alongside every auto-enrolment pension discussion, is a great way for organisations to augment their pensions work.
“Our research leads us to believe that, if this option is properly presented, employers can see that the cost of group life cover and the benefits, for them as well as their employees, are very attractive. Smaller businesses often have more of a family feel and there is concern about the impact of an employee’s death on their dependants and on the organisation as a whole.
“Presenting group life as a simple and inexpensive benefit is a massive opportunity for the group risk industry, as 1.08m new to benefit discussions start from June 1st. It seems to me that this is the day that the world of benefits changes. As pensions provision becomes the norm rather than the exception, group life has the opportunity to become the “exceptional” benefit.”