You and your dependants could be placed at serious financial risk if contributions linked to your retirement fund are suspended or discontinued, John Anderson of Alexander Forbes says.
Any reduction in contributions could have an impact on risk benefits, mainly group life and disability assurance but also extending to things suchas funeral insurance.
Any impact would need to be part of your employer’s negotiation and agreement with its employees.
Anderson says an alternative to losing the cover altogether would be to have your cover reduced.
If your risk benefits are reduced or lost, it is important that you take out additional or new individual risk cover against death and disability to ensure that you and your dependants are not left destitute if the unexpected happens.
The same applies if you are retrenched. Most people do not have sufficient risk cover even when they have group risk assurance. Loss of group risk cover may mean that, after retrenchment, you have no risk life assurance at all.
Anderson says if you are retrenched you must establish whether the provider of risk benefits to your fund provides any continuation options. Under such options you would pay the premiums yourself.