Quick Annuity Q on OMO

katy123

Hi

Why do annuity application forms ask you where the funds are coming from, as in whether it is an OMO or transfer of funds. The only difference I can see between the 2 is that OMO is received by the annuity company net of Tax free cash & transfer of funds Gross. I'm just thinking surely the option is always OMO?

mania112

No, not all ceding schemes will pay Tax Free Cash pre-transfer, so in those cases an IVP is necessary.

katy123

Interesting, so my guess is that some occ dc might not pay TFC whereas most (all?) inidividual pensions will?

dunstonh

Why do annuity application forms ask you where the funds are coming from, as in whether it is an OMO or transfer of funds.

There are two methods of transfer. With multiple originating schemes, you usually have to use the IVPPP method (transfer). With a single originating scheme, you usually use the OMO method. Some originating schemes dont support the OMO method.

Interesting, so my guess is that some occ dc might not pay TFC whereas most (all?) inidividual pensions will?

More or less right (although there are a number of individual pensions that wont support using OMO method).

Your IFA would answer these if put to them. I am assume you are using an IFA as you can usually get a better deal via an IFA than DIY.