PHI - settlement offered by Ins Co

[chesney76]

Hi All.....I am 59 and have been in receipt of PHI benefit since 2006. I suffered a breakdown after 2 years of bullying by my Manager who is the MD. In 2007 I brought a grievance claim against him but this was not upheld by the Company. In 2008 I noticed there hadn't been any contributions into my pension scheme, my employer receives a waiver benefit to cover pensions and NIC etc. When I queried it I received a letter threatening to dismiss me! I employed the services of a solicitor and over the intervening period have paid out over £4,000 in fees. The pension contributions were eventually credited back, but since then I have lost all other employee benefits, PMI (I now I have to pay to see my consultant), company car and mobile phone. I did gain the holiday pay! For the past couple of years my employer has had me jumping through hoops and made my depression worse, so much so that my solicitor thinks I have a case for a Personal Injury Claim for the way I have been treated since becoming ill.

 

Earlier this year, following another examination by the company appointed medical consultant, I received a letter stating that my employment should continue until age 60 when the PHI benefit stops. This should be paid until age 65 (my original selected retirement age) but following letters from my solicitor to my employer, their broker and the Insurance Company, the Insurance Company are insisting benefit will stop at age 62. My solicitor has suggested seeking further advice though thinks it would be difficult and costly trying to take on an insurance company and my employer is certainly not willing to fight on my behalf even though they will have supporting documentation that benefit should continue to age 65.

 

Recently I have received an offer from the insurance company (via my employers solicitors) in full and final settlement of the claim for PHI benefit. It isn't a brilliant offer. Obviously if I accept, my employer will then be free to terminate my employment. Can anyone tell me if my employer would be obligated to pay severence pay? I have a 6 month notice period and the value is not insignificant. If it were paid on top of the offer then I would be tempted to accept if only to put an end to all this.

 

Does anyone else have experience of settlements made by insurance companies? If I refuse this one will they come back with another?

[SarEl]

No, the employer is not obligated to pay severance pay. If your contract is terminated by them then the normal contrcatual provsions apply, and since you are not being paid, you will continue to receive nothing during your notice period. They may be willing to offer something, but there is no obligation on them to do so.

[chesney76]

Thank you......the way you put it makes sense....duhh!!

[honeybee13]

Hello Chesney.

 

I know a limited amount about PHI policies. I'm a bit confused by the age limit/maturity age being changed, because a normal policy has one and only one, for instance 60 or 65. You would need to get sight of the policy terms or maybe something in your employee booklet that states the age to which PHI is paid. It doesn't normally change.

 

In simple terms for this pay-off offer you've had, if you multiply the amount of benefit you receive each year by the number of years left to go, is it anywhere near what you'd expect to receive? If not, I would say no. I can't tell you if they'll come back with another offer. But if you don't accept it, I would think they'd have to carry on paying you.

 

Can you tell me any more about the insurance aspect please? I don't claim to have employment knowledge, but I have claimed under this sort of policy.

 

My best, HB

Edited November 14, 2010 by honeybee13

[SarEl]

Hello Chesney.

 

I know a limited amount about PHI policies. I'm a bit confused by the age limit/maturity age being changed, because a normal policy has one and only one, for instance 60 or 65. You would need to get sight of the policy terms or maybe something in your employee booklet that states the age to which PHI is paid. It doesn't normally change.

 

In simple terms for this pay-off offer you've had, if you multiply the amount of benefit you receive each year by the number of years left to go, is is anywhere near what you'd expect to receive? If not, I would say no. I can't tell you if they'll come back with another offer. But if you don't accept it, I would think they'd have to carry on paying you.

 

Can you tell me any more about the insurance aspect please? I don't claim to have employment knowledge, but I have claimed under this sort of policy.

 

My best, HB

 

Much as I hate to disagree with you, I am afraid that I come across this quite frequently. It is amazing that insurance policies of this sort always have some way of getting out of them - even when the method is not in the small print! A common one is for the employer to terminate the contract - which they can often do quite legally after this amount of time - and this also terminates the insurance because the insurance is the employers, not the employees. I am affraid that I have to agree with the solcitor - the only way of having even a decent chance of challenging this would be to get legal advice from a specialist - it isn't something that anyone else would be able to determine.

[chesney76]

Hi....thanks to all for their replies.....the age problem.....the original policy was taken out in 1991.....when the retirement age was 60 for women and 65 for men.....in 1998/9 the company changed the pension scheme to a GPP scheme.....the PHI/GLA was carried forward to the new scheme.....I joined in 1999.....in 2004 the PHI scheme changed in a couple of ways....."earnings" was changed to annual salary...prior to that it was "last 12 months salary plus bonus plus, plus, plus".....and the retirement age was set as 65 whether male or female.

 

I have documentation from the insurance co. which suggests changes also happened in 1996....I don't know what those changes were as I don't have access to the documents

 

When I was still working....I helped another colleague who was claiming PHI......the insurance company produced doctored documents in support of their claim....I was able to challenge them because I had the originals....so I know how devious they can be.....unfortunately I don't have the same support from my employer.

 

With regards to the offer on the table.....it represents 54% of the amount they would pay out until age 62.....and roughly 26% of what they would pay out to age 65

 

Point is...when I joined the Pension Scheme....my selected retirement age was 65.....if I wasn't covered by either PHI or GLA between the ages of 62 to 65... I should have been told about it......I wasn't

[chesney76]

Hi...sorry realised I haven't answered all the questions....my employment will continue until benefits cease....the payment of PHI will continue until I reach "retirement age" or am deemed well enough to go back to work, or die etc........if I return to work in a lesser position....PHI will make up the difference in pay.....if I change to another employer....I lose the employer pension contributions of 10%...but the benefits will continue.....can't complain.......it's a bloody good scheme

 

Just want an end to my relationship with my employer.........and an end to being in debt to my solicitor!!

[honeybee13]

Hello again. It would be good to have clarification on the age PHI stops at, but I'd say it's a pretty poor offer. If you invested the money to provide an income, I assume it wouldn't be anywhere near what they're paying you at the moment?

 

It seems to be something companies are trying at the moment, in the hopes that dangling a lump sum in front of people will blind them to what they might be losing.

 

We have a buddy who has experience of this, will try to ask him and report back.

 

My best, HB

[chesney76]

Hi All

To update you on this thread

 

I have turned down the offer from the insurance company and intend to pursue my claim that PHI benefit should continue to age 65 and not 62........only need your help to do this!!

 

The original policy dated 1991 states benefit will cease age 60 for women and age 62 for men.

A variation dated 1995 states benefit will cease age 62 for both men & women

A variation dated 2004 states benefit will cease age 65 for both men & women

 

I joined the scheme in 2000 and started claiming PHI in 2006....according to the Insurance Company my benefit will cease at age 62.

 

A female colleague who joined the scheme prior to 1995 would have the benefit paid to age 60........A colleague who joined the scheme after 2004 would have the benefit paid to age 65.

 

Is is right that they can discriminate against members in this way?

 

Also it is my understanding that the Pensions Act 1995 called on all insurance companies to equalise the retirement age to 65 for both men and women. This was for all occupational pension schemes and any insurances attached to that scheme. Am I wrong on this?

 

Can anyone suggest where I from here. Many thanks