plan32 frozen company pension

iris1957

hi. i have a company pension which has been frozen since 1987 it has 2 different sums on it one says amount paid in£5753 and other higher sum £13000 im confused is this any good this plan im 56 and i expect i will get something when im 60 anyone any idea how much i will get roughly? for amount i have paid in dosent seem much, dont know what the higher sum means

jamesd

It's probably a section 32 buyout bond, a form of pension that company pension pots can be transferred to sometimes.

The higher amount is probably the expected value in today's money when you reach retirement age. It may say what that age is, else it'll probably be 60 or 65.

You might get about 5-7% of it as income each year if you were in normal good health and bought a level annuity at age 65 or so. A level annuity is one that doesn't increase the payout each year, these start out paying about twice as much as those that go up with RPI inflation.

So something between £650 and £910 a year if you buy an annuity, depending on how much annuities are paying out at the time.

mgdavid

Iris who is the money with at the moment? Some Section 32s from that far back have guaranteed payout rates, I have one from 1984 which will pay me around 8% at NRD.

xylophone

http://www.scottishlife.co.uk/scotlife/Web/Site/faq2.asp?category=S32%20buyout%20bonds

http://www.needanadviser.com/html/article.php/zcid/1288/type/article/finance/_S32_Buy_Out_Plan

http://www.pensionsandannuities.co.uk/Guaranteed_minimum_Pension_GMP.htm?gclid=CMGbpuKgt7YCFUbMtAod2GMAAA

Might help in terms of general information.

iris1957

mgdavid wrote: »

Iris who is the money with at the moment? Some Section 32s from that far back have guaranteed payout rates, I have one from 1984 which will pay me around 8% at NRD.

hi david , it was originally norwich union then was transfrerred to avia. mine was srarted in 1984 as well while i worked for biscuit company called mcfarlane lang then in tollcross glasgow i only had it for 5 years then its been frozen since i left, any advice would be welcome thanks

mgdavid

iris1957 wrote: »

hi david , it was originally norwich union then was transfrerred to avia. mine was srarted in 1984 as well while i worked for biscuit company called mcfarlane lang then in tollcross glasgow i only had it for 5 years then its been frozen since i left, any advice would be welcome thanks

Norwich Union changed their name to Aviva (after merger with CGU). You should have been receiving an annual update letter from them confirming its value. The investment will be growing year on year, and it can be used to buy an annuity when you retire. You need a copy of the rules for the product to find out the retirement age they are assuming, and also whether there is an guaranteed payout rate. Phone them up and ask. If there's a guaranteed rate then it may well be better than you could get elsewhere so go with that. If no guarantee then on retirement you take the lump sum and buy an annuity in the open market to get the best deal you can.

xylophone

I too am wondering whether you had a company pension with McFarlane Lang that was transferred to a Section 32 buyout bond with Guaranteed Minimum Pension?

Check with Aviva.