Transfer of Section 32 pension

casey_junior

Thanks for that Dunstonh.
pensions are fine. They are not miracle plans though. They cant turn small amounts into large amounts. Security of employment doesnt matter as most are pay as you go. So, you pay when you are employed and dont when you are not.

They seem to be able to turn large amounts into small amounts. The projected value of my pension was up to £155893 providing a pension of £18262 pa. Now I think it will be just enough to do me out of income support so the only one to gain from this is NU.

To reply to your question, I'm going on the details in the policy document and I cant understand why there is no mention of GMP or as you say GAR or lump sums as seemed to be furnished to the other posters in the thread.

Can I ask NU for details on the above,an if so,by post or by phone?

dunstonh

casey_junior wrote: »

Thanks for that Dunstonh.
I am just going by the policy document, will they be able to tell me if I ask them about what to expect at retirement?

They will issue projections. You normally get them each year. You can also ask them for a policy details summary to include things like GMP, GARs and if there are protected tax free cash figures etc.

casey_junior

dunstonh wrote: »

They will issue projections. You normally get them each year. You can also ask them for a policy details summary to include things like GMP, GARs and if there are protected tax free cash figures etc.

Thanks for that dunstonh, I asked Aviva about GMP GAR and guaranteed lump sum.
They provided a value of current worth, £43790, and then an illustration of projected worth at retirement in December 2011, on growth of

5% £61900

6% £64200

7% 657000

They stress that these figures are examples, not guarantees, and will depend on bonuses added. I think this is contrary to what you say in a previous post about the value being in the value being in the guarantee and not in the bonus added.
As there is no mention of any guarantees re GAR or GMP, Protected lump sum, I am still of the opinion on reading other posts that I have been sold a pup.
Have you any suggestions as to how I may address this?

jamesd

They seem not to have answered the direct questions that you asked. Asking them again would be a good thing to try, until you get an answer that tells you whether those things are or aren't part of your particular plan. The maximum pension seems high for the values given without some form of guarantee in place.

eilsa123

I too have a section 32 with NU which comes out this April.
I take on board the advice that we should not be concerned about annual bonuses,however how can a large company produce zero profits in its WITH profits fund every year for the past 10 years,and also zero terminal bonus.I do understand that investments have been tough but they have at least gone Up as well as down.
My wife has a section 32 with profits plan with another company for the last 22years,1 year longer than mine,that has grown by 240% more than the Nu fund.
Any thoughts?

dunstonh

however how can a large company produce zero profits in its WITH profits fund every year for the past 10 years,and also zero terminal bonus.

Just look at the performance of the FTSE100 over the last 10 years and you will see why. Especially if you look around 2001-2002 when the FSA effectively forced insurers to sell equities at the bottom of the market and therefore miss out on the recovery and instead be in low returning investments. i.e. if you had to sell after a 43% loss and then put them in investments returning around 3-4% a year then you would take over a decade to recover the loss.

I do understand that investments have been tough but they have at least gone Up as well as down.

The problem is that With Profits are not like conventional investments. Unit linked funds go up and down with the markets and that has no effect on the solvency of the insurer. However, the With Profits fund does have an impact on the solvency of the provider. That is one of the reasons you have seen so many insurers close their doors for new business over the last 15 years and try and sell their books cheap as they dont want the liability.

My wife has a section 32 with profits plan with another company for the last 22years,1 year longer than mine,that has grown by 240% more than the Nu fund.

Is hers unit linked or with profits? Does hers have a GMP that is unreachable or guaranteed annuity rates?

casey_junior

eilsa123 wrote: »

I too have a section 32 with NU which comes out this April.
I take on board the advice that we should not be concerned about annual bonuses[/I]

Why do you accept this when your fund value is the total of the sum assured + annual bonus + terminal bonus.

,however how can a large company produce zero profits in its WITH profits fund every year for the past 10 years,and also zero terminal bonus.

I think the answer to this is that the profits go to the shareholders and not the policyholders.


I do understand that investments have been tough but they have at least gone Up as well as down.

And Aviva proudly boast how well their with-profits perform every year but then say they are holding the bonus to the previous years value, nil.
It must feel great to have a captive audience.

kidmugsy

I'm struck by how clumsy the English is. Consider "The rate of increase in Pension shall not be such that the pension and Widow's pension which can be purchased by the capital shall be less than the GMP and the GMWP respectively."

I thnk that that probably means "The rate of increase in Pension shall be such that the pension that can be purchased by the capital shall equal or exceed the GMP, and correspondingly for the Widow's pension and the GMWP." But am I right?

kidmugsy

Or "Pension shall increase by enough to ensure that the pension that can be purchased by the capital shall equal the GMP, or exceed it, and correspondingly for the Widow's pension and the GMWP."

eilsa123

Thank you dunstonh for your advice.My wife's policy is with profits with a small GMP,She has another policy which is a frozen personal pension with the Pru.There were only 4 years premium paid and it has been frozen for over 20 years it matures on the 1/7/11 and has a terminal bonus of £1600 plus annual bonuses.I just don't see how NU got/gets away with it.They have declared good bonuses for 2010,but my policy which matures next month doesn't qualify???