1. Age discrimination and group risk benefits Protection Review Seminar July 2007 Kareena Hooker, TOWERS PERRIN HR Services Sue Sneddon, AEGON Scottish Equitable This presentation is directed at business professionals. It should not be distributed to, or relied upon, by private customers.

2. 2 The HR Directors’ dilemma

3. 3 Why? The ‘Age Regulations’ –1 October 2006 –1 December 2006 Unlawful for employers to discriminate on grounds of age –Direct v indirect Can’t use age to force retirement before 65 Discrimination extends to all terms of employment including benefits offered as part of the contract of employment e.g. –Pensions –Death benefits –Occupational sick pay –Critical illness cover

4. 4 Key points Employers use group risk insurance to insure some/all of their employee benefit promises Age mix will influence risk and may increase insurance cost Employers can’t use cost alone to objectively justify not providing benefits Passing on costs to employees brings its own challenges

5. 5 Age Discrimination – fact or fiction?

6. 6 Challenges and opportunities Providers Understand employer’s needs and issues Balance underwriting needs with selection risk Identify cost neutral options Communicate what’s available Minimise business disruption Product innovation to address new employer needs New players to fill market gaps

7. 7 Challenges and opportunities Providers Understand employer’s needs and issues Balance underwriting needs with selection risk Identify cost neutral options Communicate what’s available Minimise business disruption Product innovation to address new employer needs New players to fill market gaps Advisers Demonstrate value to clients Help clients review employee benefits packages and cover Work with legal advisers to help minimise age discrimination exposure Challenge providers to offer suitable cover Helps open dialogue with prospective clients

8. 8 Overview A bility not age should be key criteria in assessing suitability for work G overnment needs to encourage employees to work longer E ncouraging good employment practices

9. 9 Important information This information is based on our understanding of the legislation which is subject to change. Scottish Equitable plc, Registered Office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517). Authorised and regulated by the Financial Services Authority. Member of the AEGON Group. www.aegonse.co.ukwww.aegonse.co.uk Towers, Perrin, Forster & Crosby, Inc. registered in England and Wales under BR 001790 Incorporated with limited liability in Philadelphia in the Commonwealth of Pennsylvania, USA., under number 359481 Registered address: 71 High Holborn, London WC1V 6TP Authorised and regulated by the Financial Services Authority. www.towersperrin.com