Section 32 bond!!

BobTheBuilder1

Hello
This is my first post so please be gentle with me.
I have a section 32 bond which has a policy date of April 2014 when i will be 60,they have just written to me stating that i am unable to take my benefits at this date but must wait until State pension age of 65 due to underperformance.I need to know if there has been any RECENT legislation that would prevent me and an IFA with the appropriate qualifications to transfer this policy into an Immediate Vesting Personal Pension Plan(IVPPP).I do understand that my guarantees would be lost on transfer.
Thanks for reading

dunstonh

I need to know if there has been any RECENT legislation that would prevent me

You would lose the GMP on transfer but its possible to take it under an IVPPP now.

and an IFA with the appropriate qualifications to transfer this policy into an Immediate Vesting Personal Pension Plan(IVPPP).

You would need an IFA or restricted adviser (whole of market equivalent) with J05, G60 or AF3 qualification. A search on unbiased website selecting pensions will narrow it down a little. Then look at the qualification for the advisers and it will show if they have one of those.

BobTheBuilder1

Thanks for your valuable input Dunstonh,perhaps you or any other knowledgable IFA on the boards could help me decipher this latest reply i had from my provider when i asked if i could transfer this policy away, after being told that i have to wait another 5 years for my benefits:
Quote
"By law,a transfer can only take place if the company`s actuaries can certify that the transfer value available is greater than the amount needed,on a prescribed basis,to provide the Guaranteed Minimum Pension liabilty held under your plan.This amount is known as the cash equivalent transfer value (CETV )
The CETV calculation has been done and and the value is lower than the transfer value on the policy,therefore a transfer of benefits is allowed".
Have i totally misunderstood this statement,should i not be able to receive my benefits at my chosen retirement age of 60 if the transfer value is greater than the GMP liabilty?
This is all pre 88 GMP and no GARS.
Thanks for reading

xylophone

I am wondering whether you are thought to be considering a transfer to a company that would accept the GMP?

Assuming that you are male, the GMP is not payable until you are 65.

Perhaps there is enough in your policy to meet the GMP when it falls due in five years time?

Would a call to the existing provider clarify matters?

vvvvvvvvvvvvvvvv

So can companies just renege on an agreed payout date?i thought they were obliged to pay the GMP on the agreed date at the policies inception?

Seabee42

A guaranteed minimum pension (GMP) is only guaranteed from state pension age (SPA)(60 for women and 65 for men).

Preservation legislation means they must provide the GMP with increases to SPA often referred to as a revalued GMP.

So although you may want to take the benefit earlier what they are telling you is that probably due to low annuity rates if you took the pension now it would not be enough to cover the GMP at SPA.

It is probable that your policy value at SPA would also not be enough to cover your GMP but at that point they have to pay it anyways.

There is therefore quite a risk if you transfer the policy out even if you could that it would be worth less than the pension that is guaranteed.

For pensions after 17 May 1990 it is not allowed to discriminate on the grounds of sex. Because of the inherent sex equality issues in not letting you take the benefit from 60 when a woman could I would however raise that question with them.

xylophone

state pension age

is no longer necessarily the same as GMP age.

http://www.barnett-waddingham.co.uk/news/2012/07/what-is-a-gmp/

" This amount is then revalued to protect it against inflation to age 65 (men) or 60 (women). GMP entitlement ages are currently age 65 for males and 60 for females despite changes in the State Pension Age."

WBCPB

wrong thread.

BobTheBuilder1

xylophone wrote: »

I am wondering whether you are thought to be considering a transfer to a company that would accept the GMP?

Yes i think you are correct,i do not think they would comment on me being able to transfer into a IVPP.

Can a provider refuse to allow the transfer of a section 32 policy into a IVPP for any reason?
Thanks in advance.

Seabee42

If you can transfer the benefit to a Personal Pension Plan it will remove the GMP all the receiving body has to do is illustrate to you what benefits it will buy (i.e. that you loose lots of guarantees).

BobTheBuilder1

Seabee42 wrote: »

If you can transfer the benefit to a Personal Pension Plan it will remove the GMP all the receiving body has to do is illustrate to you what benefits it will buy (i.e. that you loose lots of guarantees).

The fact that you have stated "if you can transfer" rather than "when you transfer" seems to imply that there are reasons the transfer can be refused?

Thanks