Guaranteed minimum pension or annuity ???

skronk

Hi all,

Sorry, but totally clueless here and posting on behalf of my wife (63 y.o.) part time worker.!!

She had a quote from Aviva of £4417 P.A on a £66752 pot (taken over from Norwich Union) in August 2015. This was a defined benefit Section 32 plan which Aviva told her had no lump sum value, and had to be taken as a guaranteed minimum pension.

She has now been requoted and although the pot is up slightly, they have removed the GMP figure from the quote and appear to be pointing her toward an annuity. Would she lose money going down this road, and does she have the right to demand the "guaranteed minimum pension" as quoted in their first response in August 2015 ??

Sorry, but total minefield to me...so any help greatly appreciated.

woolly_wombat

skronk wrote: »

Hi all,


She has now been requoted and although the pot is up slightly, they have removed the GMP figure from the quote and appear to be pointing her toward an annuity. Would she lose money going down this road,

YES. She wouldn't be able to purchase an annuity of £4417.44 p.a. from a pension pot of just over £66752 at age 63.

and does she have the right to demand the "guaranteed minimum pension" as quoted in their first response in August 2015 ??

Sorry, but total minefield to me...so any help greatly appreciated.

The GMP became payable at age 60, so I'm not sure what the position is now.

Why didn't she take it at 60, and why didn't Aviva contact her until 2015, when she would already have been over 60?

Have a look at
http://www.aviva-for-advisers.co.uk/site/public/tech-centre/tech-article-detail/section-32-arrangements-gmps-and-transferring

skronk

woolly_wombat wrote: »

Why didn't she take it at 60, and why didn't Aviva contact her until 2015, when she would already have been over 60?

Have a look at
http://www.aviva-for-advisers.co.uk/site/public/tech-centre/tech-article-detail/section-32-arrangements-gmps-and-transferring

Aviva have never contacted her. First contact was initiated by her in August 2015 !!
Thats when she got the GMP quote which has since disappeared from the quotation...last week !

dunstonh

This was a defined benefit Section 32 plan which Aviva told her had no lump sum value, and had to be taken as a guaranteed minimum pension.

Not strictly true. That may be the only option available on that particular plan. But it is not the only option.

She has now been requoted and although the pot is up slightly, they have removed the GMP figure from the quote and appear to be pointing her toward an annuity.

That is another option that is available.

Would she lose money going down this road, and does she have the right to demand the "guaranteed minimum pension" as quoted in their first response in August 2015 ??

Either the plan has GMP or it doesnt. It is possible to give up the GMP by transferring into another plan which wont accept the GMP and take the options on that other plan. However, if the benefits are taken under the section 32 bond with GMP then GMP will have to apply.

Thats when she got the GMP quote which has since disappeared from the quotation...last week !

What is the guidance/advice from her adviser?

skronk

Theoriginal quote in August has GMP of £4417p.a. Last weeks quote has no GMP, and upon calling Aviva she was asked to apply for annuity. GMP was never mentioned.

Pensionwise only seem to help of you have a defined contributions pension, so we cancelled next Tuesdays appointment.

We live on a Scottish island. Advisers a wee bit thin on the ground, but we are looking.

Thanks for your input.

neilvw

woolly_wombat wrote: »

YES. She wouldn't be able to purchase an annuity of £4417.44 p.a. from a pension pot of just over £66752 at age 63.


The GMP became payable at age 60, so I'm not sure what the position is now.

Why didn't she take it at 60, and why didn't Aviva contact her until 2015, when she would already have been over 60?

Have a look at
http://www.aviva-for-advisers.co.uk/site/public/tech-centre/tech-article-detail/section-32-arrangements-gmps-and-transferring

That article states that deferred GMP after GMP age has to be increased by 1/7th of 1% per week, i.e. 7 point something % per annum, so the OP's wife should be able to take well over £5,000 pa now.

Sounds like Aviva have dropped the ball in not contacting her in the run-up to 60 or indeed since. She should ask for an immediate retirement quote to include deferred GMP.

xylophone

Your wife has the original policy document? What does it say about GMP?

http://www.financialadvice.net/s32_buy_out_plan/zone/1288

What is her state pension situation?

xylophone

https://forums.moneysavingexpert.com/discussion/comment/69185664#Comment_69185664

Did you read post 9 above?

woolly_wombat

skronk wrote: »

Aviva have never contacted her. First contact was initiated by her in August 2015 !!
Thats when she got the GMP quote which has since disappeared from the quotation...last week !

Did you move and did your wife forget to inform Aviva? Could that explain why they didn't contact her shortly before she turned 60?

woolly_wombat

neilvw wrote: »

Sounds like Aviva have dropped the ball in not contacting her in the run-up to 60 or indeed since. She should ask for an immediate retirement quote to include deferred GMP.

Yes, the GMP should have been paid at 60 - don't let your wife be fobbed off with this annuity nonsense. The GMP is valuable and the likelihood of being better off taking an annuity is infinitesimally small.

It has been reported that some Aviva policyholders have been affected by errors stemming from the merger of Norwich Union and CGU in 2000. Please read:
http://www.thisismoney.co.uk/money/news/article-2554472/Four-million-savers-short-changed-Aviva-compensation-Insurers-323million-bill-merger-blunder.html

You also need to be aware that if the failure to pay your wife's GMP at 60 is due to an error by Aviva then it looks as though they should be paying your wife interest of 8% pa compounded as part of the process of putting her back into the position she would have been in had the error not occurred. Please read: http://www.telegraph.co.uk/finance/personalfinance/pensions/11397774/Thousands-of-savers-cheated-out-of-compensation-for-pension-errors.html

I strongly suggest your wife also contacts the Pensions Advisory Service:
http://www.pensionsadvisoryservice.org.uk/
They can be contacted by 'phone or online.

[Deleted User]

skronk wrote: »

Hi all,

Sorry, but totally clueless here and posting on behalf of my wife (63 y.o.) part time worker.!!

She had a quote from Aviva of £4417 P.A on a £66752 pot (taken over from Norwich Union) in August 2015. This was a defined benefit Section 32 plan which Aviva told her had no lump sum value, and had to be taken as a guaranteed minimum pension.

She has now been requoted and although the pot is up slightly, they have removed the GMP figure from the quote and appear to be pointing her toward an annuity. Would she lose money going down this road, and does she have the right to demand the "guaranteed minimum pension" as quoted in their first response in August 2015 ??

Sorry, but total minefield to me...so any help greatly appreciated.

Hi skronk,

I'm happy to refer to our Pension team here and ask they look in to things for your wife.

If you can ask your wife to contact us at social@aviva.co.uk with the following information, I'll do all I can to help:

• Full name
• Date of birth
• Postcode
• Pension reference number
• Contact number
• Please also mention this thread so we can link the email and the information here together

I hope this helps

Many thanks,

Marv
Aviva Social Media Support