Employee Benefit Views

In England, ‘thank you for smoking’ is more than a movie title

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Posted November 28, 2012 by By Kelley M. Butler at 01:13PM. Comments (1)

 

I’ve read a lot of benefits stories over much of the years—including ones involving sexting scandals http://ebn.benefitnews.com/news/sexting-and-social-media-cases-turn-heads-2683235-1.html and leave cheaters http://ebn.benefitnews.com/blog/ebviews/look-for-leave-cheaters-on-facebook-2682571-1.html — where I wasn’t sure whether to laugh or cry. 
An email I received recently from a colleague falls into the same category. After reading an EBN inBrief story about government anti-smoking incentives http://ebn.benefitnews.com/news/hhs-proposals-increase-anti-smoking-incentives-2729225-1.html, he wrote to ironically point out:
“My cousin from England receives a monthly enhanced “smoker’s” pension … a higher pension than a non-smoker. The actuaries in England figure that a person can be paid a higher pension since the person won’t be living as long — true actuarial mathematical logic! From time-to-time, they ask him to confirm that he’s still smoking. I’m sure that would go over just peachy here in the USA!”
I did some digging, and in fact, it’s true: Brits who smoke — as well as those who are overweight, have high blood pressure, high cholesterol and other health risks — receive anywhere from a 7%-16% higher annuity in retirement income than those with good health. 
The reason is just as my colleague explained it: insurers are betting those people will die sooner. In fact, according to a BBC article on the topic http://www.bbc.co.uk/news/business-17997352, married pensioners could see their overall annuity decrease if one spouse smokes and the other is in good health, thus encouraging couples to hook up then light up. And if you beat the odds by smoking and live to old age — ka-ching!
Un. Be. Lieveable.
This is definitely an area where I think the Brits have it backwards. What do you think? Share your thoughts in the comments.  

 

I’ve read a lot of benefits stories over much of the years—including ones involving sexting scandals and leave cheaters — where I wasn’t sure whether to laugh or cry. 

An email I received recently from a colleague falls into the same category. After reading an EBN inBrief story about proposed government anti-smoking incentives, he wrote to ironically point out:

“My cousin from England receives a monthly enhanced “smoker’s” pension … a higher pension than a non-smoker. The actuaries in England figure that a person can be paid a higher pension since the person won’t be living as long — true actuarial mathematical logic! From time-to-time, they ask him to confirm that he’s still smoking. I’m sure that would go over just peachy here in the USA!”

I did some digging, and in fact, it’s true: Brits who smoke — as well as those who are overweight, have high blood pressure, high cholesterol and other health risks — receive anywhere from a 7%-16% higher annuity in retirement income than those with good health. 

The reason is just as my colleague explained it: insurers are betting smokers will die sooner. In fact, according to a BBC article on the topic, married pensioners could see their overall annuity decrease if one spouse smokes and the other is in good health, thus encouraging couples to hook up then light up. And if you beat the odds by smoking and living to old age — ka-ching!

Un. Be. Lieveable.

This is definitely an area where I think the Brits have it backwards. What do you think? Share your thoughts in the comments.  

 

 

1 Comment

Posted by: Frances R | November 29, 2012 3:17 PM

Technically speaking it is fair. Actuarily don't men get paid more in an annuity than a woman (all other things being equal) because she will live longer than he will? How is this any worse than laws here that encourage single parenting because you don't make as much money per child if you are a family on welfare? Many laws that are supposed to help the disadvantaged or needy don't work well once implemented.

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