Post-retirement Medical Aid Benefits
While offering post-retirement medical aid (PRMA) as a benefit is no longer common, many companies still have ex-employees drawing on this benefit as well as staff who currently contribute to the benefit.
PRMA potentially compromises a company’s bottom line because the Accounting Standard IAS19 compels businesses to disclose the enormous costs of providing the benefit to pensioners. This cost is exacerbated by the escalating costs of healthcare.
Old Mutual Structured Insurance (OMSI) has developed various solutions to address the PRMA needs of employers and to assist them in offsetting the liability. Solutions range from complete removal of the company's PRMA obligations to gradual funding of the liability through insurance policies or retirement funds.
The common vehicle used is a long-term insurance policy designed to take care of the PRMA liability in a simple and cost efficient manner.
Features & Benefits
- The assets are protected in that they cannot be accessed by creditors thereby safeguarding the future benefits of your employees.
- Transfer of risks: Old Mutual manages the problem leaving the employer free to focus on its core business.
- Tailor-made solutions: our consultants will help you structure a package to meet your specific requirements based on both current and future expenses.
- Fairness & transparency: policy investment profits are effectively shared with the company and their pensioners, with full disclosure around costs.
- Cost-efficiency: our solutions are designed to reduce all expenses associated with PRMA provision. Premiums are kept to a minimum and Old Mutual removes the costly administrative burden.
- A holistic solution: companies gain access to the full range of Old Mutual’s employee benefits and asset management experience enabling the efficient risk management.
- Powerful financial backing: Old Mutual transfers a significant portion of a company’s liability to its own books and our dual-listing fully backs the guarantee provided.