Protected rights - new legislation from 6th April

steveksullivan

I understand that Government legislation from 6th April says that protected rights elements of Personal Pension policies can be taken from age 50. I have two personal pensions, one with Prudential one with Equitable.

Spoken to Prudential – no problem -can take Protected Rights benefits (both tax free lump sum and annuity) from 6th April. Spoken to Equitable who say their ‘interpretation’ of the legislation is that they still wont pay until age 60 !!



To me the legislation is black and white – how can they do this ?

Prudential also say they will accept me transferring my Equitable protected rights to them and they will pay out !! Anyone else had similar experience or know whether Equitable can do this .... or are they just stalling ??

Any comments very welcome !

dunstonh

The legislation is not yet in effect and much of the workings are still not in place. Some insurance companies are calling for the Govt to delay it until 2007 (unlikely but we are only 6 weeks away and the Govt still hasnt finalised things. It doesnt give the providers long to get their systems altered).

Eq Life could be waiting for the rules to be cast in stone before they update their reporting of information.

Is the Eq Life plan an appropriate personal pension plan or a section 32 with GMP?

steveksullivan

to be clear, Equitable Life didn't disagree with my quote of the proposed legislation, just said they weren't going to do it !!

So my question really is when is 'legislation' NOT legislation !!

Do you know whether the proposed legislation allows for companies to 'choose' whether they adhere to it ?

Ahh ..... the words 'section 32 buyout' do ring a bell .... allthough it was many years ago that I took it out ...... does this make a difference ??

Many thanks for such a speedy reply !!

dunstonh

Section 32s can take benefits at any age between 50 and 75 without the policyholder retiring (subject to the funds being sufficient to provide the GMP from state pension age).

I wonder if there is insufficient funds to provide the GMP in your case. Your options then would be to leave it or transfer out into a personal pension but you would lose all guarantees that it has.

Take a look at your paperwork and see if it a S32 and see if guaranteed minimum pension/GMP is mentioned. There may also be mention of a guaranteed annuity rate.

EdInvestor

There may also be mention of a guaranteed annuity rate.

Policyholders with GARs at Equitable voted to give them up in return for a policy uplift in the so-called "compromise deal" vote in 2001.

What Equitable may mean is that they won't allow you to take benefits as a contractual event after A-day - ie to leave the WP fund with no MVA exit penalty.