Protected rights

If your pension policy contains or is all “Protected Rights” (which will be shown on your latest Pension statement from your current pension provider), you are restricted in the choices that you have when it comes to finding the best annuity rates for this part of your pension. The reason for this is that Protected Rights replaced the part of the second State Pension, which you were €œcontracted out€ of. This dictates that if you are legally married then it must provide your spouse with a 50% pension upon your death.

Guaranteed Annuity Rates

There are “Guaranteed Annuity Rates€” that are written into some older Retirement Annuity and Personal Pension Plans that provide potentially higher pension annuity rates than the current rates available on the open market today. You may have to take your benefits in the structure dictated by the existing pension scheme. Such terms are often very attractive and as such you would normally be better taking the pension direct from you existing pension provider as these would provide the best annuity rates.

Section 32 Buy-Out-Plans including GMP A Section 32 Buy-Out-Plan is derived from a transfer from an old Company Pension Scheme. Some Section 32 plans contain Guaranteed Minimum Pension (GMP) benefits.

Where a final salary pension scheme had contracted out of the state scheme, the GMP relates to the earnings component of the state basic pension that the member would have earned while in the employer€™s scheme, had the member not contracted-out. GMPs ceased to accrue after 5 April 1997. A S32 Buy Out Plan can receive GMP and continue to protect those guarantees. Transfers in can only be accepted where there are sufficient funds to provide the Guaranteed Minimum Pension liability.

Triviality

If the total value of all your pension plans, including plans you have with other insurance companies and any pensions in an employer€™s scheme, is less than £18,000 (current tax year 2010/2011) then Government legislation allows you to take this is one lump sum payment. This option is known as commutation and 25% of the lump sum you receive is tax-free and the remaining amount will be subject to income tax. If you choose this option you would not receive a regular income for the rest of your life.\r\n\r\nWith any best annuity rates research it would be advised to seek the help of a qual

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